From Zacks: When it comes to investing in the tech space, investors normally dwell around FANG stocks. The FANG stocks are Facebook (FB) , Amazon (AMZN) , Netflix (NFLX) and Google, which later restructured itself as Alphabet (GOOGL).
These players have dominated the technological sphere and boosted shareholders’ wealth for several years now.
But things turn bitter sometimes when overvaluation concerns and high-beta sell-off creep in. This year was no different as FANGs flopped right in the middle. After a rally, the biggest technology stocks collapsed on overvaluation concerns in June, with the top five tech companies including Apple AAPL losing more than $97.5 billion in market value in a single day (read: Forget Big Tech, Bet on These Overlooked ETFs).
If we rule out this issue, the technology sector has been on fire this year thanks to improving economic and industry fundamentals and Trump’s proposed corporate tax reform. The rise of new technology such as cloud computing, big data and Internet of Things has been the wind beneath the wings.
Notably, Trump also proposes a lower tax on over $2.6 trillion in offshore earnings. Overall, tax cuts and a one-time repatriation tax could boost share repurchases by companies. Now, tech behemoths hoard huge cash overseas and are poised to benefit the most from Trump’s proposed tax reform. Also, investors can expect higher dividend distribution or share buyback from this move.
Notably, Facebook and Netflix have solid weights in PowerShares NASDAQ Internet Portfolio (PNQI – Free Report) and First Trust Dow Jones Internet Index (FDN – Free Report) . Facebook has a solid weight in iShares U.S. Technology ETF (IYW – Free Report) and Global X Social Media Index ETF (SOCL – Free Report) . Now, PNQI is up 37.8%, FDN has gained 35.3%, IYW is up 33.8% and SOCL has jumped 53.1% (as of Dec 14, 2017).
But investors would be excited to know that there is a lot of winning tech ETF ways to make profits. These ETFs have proven more efficient that FANG funds so far this year.
ARK Web x.0 ETF (ARKW – Free Report) – Up 84.9%
The ARK Web x.0 ETF is an actively-managed ETF that invests primarily at least 80% of its assets in domestic equity securities and U.S. exchange traded foreign equity securities of companies that are relevant to the fund’s investment theme of Web x.0. The fund charges 75 bps in fees. Cloud Computing & Cyber Security takes about 23% of the fund followed by Big Data & Machine Learning that accounts for about 20% (read: 4 Reasons Why Investors Love Passive ETFs).