FANG - ETFs FANG+ ETF

[Faramir]

About FANG
ETFS FANG+ ETF aims to provide investors with a return (before fees and expenses) that tracks the performance of the NYSE®FANG+™ Index by investing in the shares that make up the index in proportion to their index weights. The index focuses on those companies representative of high growth technology or advanced technology driven sectors such as in the consumer discretionary on the major US stock exchanges.

FANG includes some of the top innovation leaders across today’s technology and tech-enabled companies. It is equally weighted across all companies (index constituents) and rebalanced quarterly.

Info found on this website.
http://www.etfsecurities.com.au/product/fang

Ten Stocks in one EFT, rebalanced each quarter

• Tesla
• Netflix
• Alibaba GRP - ADR
• Amazon
• Apple INC
• Nividia
• Twitter
• Alphabet Inc - A (owns Google)
• Baidu Inc - SP ADR
• Facbook Inc - A

MER: 0.35%
Inception: 27/Feb/20

As of 15 July 2020
NAV $13.0902
Shares: 4,001,407
AUM: $52,379,358.37

 

[Faramir]

(Above post, I tried to be factual. This post, I will be ranting and showing an emotion or two?)

This EFT has grown since inception. From the high $8 to now roughly $13. Have I missed the boat? Will FANGs keep going up and up? Are thematic EFTs worthwhile?

I have no overseas exposures other than a few companies earning income overseas and one Chinese disaster. This is why I am considering an EFT. I think a thematic EFT may have a edge over a vanilla index EFT like VAS, STW (aussies EFTs) or IVV where I want international exposure? Actually how do I evaluate whether a vanilla EFT is much better than a thematic EFT? Will I pick the correct theme for the future? If I am to seriously consider FANG, I will have to sell another stock (maybe even at a loss). So I am just sitting on my hands and wondering.........

 

[Dona Ferentes]

plenty of options out there now. There are something like 7 or 8 (active) international ETFs focusing specifically on tech.

(Looking for a good article I saw recently)

got it

https://www.afr.com/wealth/investing/how-to-ride-the-tech-etf-rocket-20200715-p55ce5

 

[Dona Ferentes]

(Above post, I tried to be factual. This post, I will be ranting and showing an emotion or two?)

This EFT has grown since inception. From the high $8 to now roughly $13. Have I missed the boat? Will FANGs keep going up and up? Are thematic EFTs worthwhile?

I have no overseas exposures other than a few companies earning income overseas.

Will I pick the correct theme for the future? If I am to seriously consider FANG, I will have to sell another stock .........

Lots of questions! Big picture questions!! Good questions!!!

Diversification (not all eggs in one basket) is a way of managing risk. And also allowing exposure to assets that a more narrow portfolio may not hold, such as exposure to international (Aust is less than 2% of global market); there are many sectors barely represented in this country.

But then the issue of timing creeps in. Tech has done well; but has the run been made, and is it mean reverting? In other words, will the gains made by growth stocks get trimmed and value style return?

The great salutary lesson for tech was the 2000 bubble: "To be desirable an internet company must be ever so slightly unknowable." "It must remain forever in a state of pure possibility." - Michael Lewis (Liar’s Poker, The Big Short, Moneyball, The Blind Side, Flash Boys, The Fifth Risk), wrote in February 2000, a month before the tech stock bubble burst.

Since late March 2020, the S&P500 (which includes the large-cap tech stocks) has risen 46 per cent. The technology-laden NASDAQ has climbed 56 per cent. The "FAANG+" stocks – Facebook, Apple, Amazon, Netflix, Google and other big techs like Tesla – have soared 83 per cent.

And it is seen as an acceleration of a trend; according to Morningstar research, for the year-to-date large value stocks have underperformed large growth stocks by nearly 23 per cent. Over 12 months the performance gap is almost 25 per cent against a five-year average of 8.43 per cent and a 10-year average of 5.22 per cent.

"Most conventional stocks can be conventionally analysed by discounting their future cash flows by a risk-free rate, plus a risk-premium that reflects the investor’s assessment of the possibility that the cash flows won’t meet their expectations.

When the risk-free rates – generally the long term bond rates – are near zero, or even negative, and equity risk premiums are compressed by competition because investors are all chasing the same returns from the same investments, stock prices will rise. Investors will accept the lower returns for greater risks because they have no positively real-returning alternatives.

Tech stocks, because their upside isn’t and can’t be defined or capped, meet the Lewis description of being "slightly unknowable" and having "pure possibility."

The pandemic, which has injected massive doses of new ultra-cheap liquidity and credit into financial systems and economies, is amplifying and accelerating the long term trends and causing investors to chase the stocks with the most amounts of "pure possibility."

The moment those stocks, priced for something beyond perfection, become knowable – the moment any limit to that potential can be discerned and they can be assessed more conventionally – of course, their valuations will plummet. - Steven Bartholomuez

 

[Faramir]

@Dona Ferentes Thank you for your very informative reply. I have the hard copy of AFR article that you have linked too. That article is implying that I should use a specialist fund manager instead of putting money in an 'Active EFT' like FANG. For me to discuss that article, that is a different thread. I don't subscribe to AFR and only buy a hard copy once in a while. It was a fluke that I found that Tony Featherstone article.

Your post above expresses my primitive feelings. FANGs is a bubble of some kind. It may 'never' burst - like one of those massive bubbles that you see kids' entertainers make, those bubbles just keep growing.

Sorry for my simple and delayed response. I am trying to make time to write a more valuable response.

Am I right when I say at least 4-5 of those stocks make a profit? Don't worry about their market cap relative to cash flow? My simple mind tells me that I should have brought FANG either at inception, or during April or at the next crash?

There are other Active EFTs I am vaguely thinking about. I will post my thoughts hopefully soon on other threads. Thank you Dona Ferentes.

 

[Dona Ferentes]

Been thinking about this; not having any idea as to where you are on your journey of wealth accumulation, have an active or passive view to investing, want to trade, and all that. And I definitely won't give advice.

I find it easier for tax treatment to buy Aust domiciled; direct via OS exchanges is cheaper but complex.
My view is ETFs are good for because of lower costs. If you have a global or macro view and want to invest somewhere, then ETFs have a use. Passive index exposure, can move in and out easily.
Active ETFs are set up for thematic exposure, as you have found with Tech. That involves a view that some sector is going to do well, and the composition of holdings can be quite diffuse.
Then there are fund Managers, both listed and unlisted. These try to beat the index and can hold varying amounts of cash, according to their view of where markets are going. Many of them are Aussie based; Magellan is probably the most successful. https://www.magellangroup.com.au/funds/
And a bunch of International LICs, through which I have some holdings.

 

[Dona Ferentes]

In the S&P500, some 5 stocks (guess which) have increased their market cap by the same amount as the other 495 have lost since the beginning of the year.

The S&P index has powered ahead of profits driven by PE expansion not valuations driven.

 

[Dona Ferentes]

FANG, and FAANG for that matter is dead; long live FAATMAN (Facebook, Apple, Amazon, Tesla, Microsoft, Alphabet and NVIDIA)

 

[over9k]

FNGU is a triple levered etf if you really want to swing for the fences.

 

[Gunnerguy]

Nice dividend from FANG ETF. $1.469 with SP at $18.83 and dropping obviously. Nice yield.
Last year was $0.119.

 

[Gunnerguy]

Sold 30% of my FANG and NDQ yesterday.
Had a great run over the past 12+ months. Time to take some money off the table. Although a long term investor, I'm taking some money off the table as IMHO were going to have a bit of a downturn in the next month or two. A bird in the hand is better that 2 in the bush. I did the same in last Feb and was 50% out of my US holdings and was a very lucky market timing move. I then DCA'd fully back in over June/July so the move out/in served me well.
Gunnerguy.

 

[over9k]

Sold 30% of my FANG and NDQ yesterday.
Had a great run over the past 12+ months. Time to take some money off the table. Although a long term investor, I'm taking some money off the table as IMHO were going to have a bit of a downturn in the next month or two. A bird in the hand is better that 2 in the bush. I did the same in last Feb and was 50% out of my US holdings and was a very lucky market timing move. I then DCA'd fully back in over June/July so the move out/in served me well.
Gunnerguy.

I did the same with TQQQ at $126 gunner. Now time for the swing play!

 

[Dona Ferentes]

Had a great run over the past 12+ months. Time to take some money off the table. Although a long term investor, I'm taking some money off the table as IMHO were going to have a bit of a downturn in the next month or two.

After that run from March 2020 at $10, when FANG first appeared, FANG at $17 today is where it was in Jan 2021. But then there was the 30 June Ordinary Dividend/distribution amount per security of AUD 2.17222353

There have been highs and lows, and probably a dozen times above AND below that level during the CY.

 

[Gunnerguy]

After that run from March 2020 at $10, when FANG first appeared, FANG at $17 today is where it was in Jan 2021. But then there was the 30 June Ordinary Dividend/distribution amount per security of AUD 2.17222353

There have been highs and lows, and probably a dozen times above AND below that level during the CY.

That was a lovely yield distribution for me and Mrs. GG. Unexpectedly large which means We has to pay tax this year when added to the FMG dividend ?.
Gunnerguy

 

[Dona Ferentes]

a decade-long bull market is being led by the same group of U.S. tech-related stocks that we used to call the FAANGs — Facebook (now Meta), Amazon, Apple, Netflix and Google (now Alphabet).

Maybe time for a new name .... MAANA (from heaven?)

 

[Iggy_Pop]

Part of my picks for the CY 23 stock tipping. The majority of the tech stocks have had a poor year down 50%. I have targeted my picks on EVs which will influence the market positively over the next 12 months. And with Elon doing less with Twitter, Tesla stocks will go up

Iggy

 

[divs4ever]

Part of my picks for the CY 23 stock tipping. The majority of the tech stocks have had a poor year down 50%. I have targeted my picks on EVs which will influence the market positively over the next 12 months. And with Elon doing less with Twitter, Tesla stocks will go up

Iggy

i was thinking more along the line of the Fed needed to prop the markets so would either start buying more options/futures or send in the PPT and so avoided BBUS ( or the reverse NASDAQ ETF )

 

[Dona Ferentes]

FANG, and FAANG for that matter is dead; long live FAATMAN (Facebook, Apple, Amazon, Tesla, Microsoft, Alphabet and NVIDIA)

And now , perhaps because of the unflattering implications in earlier acronyms, this cohort has a new label.

The MegaCap 8

The eight are: Alphabet, Amazon, Apple, Meta, Microsoft, Netflix, NVIDIA, and Tesla.

....with some commentary as to why they may be a relatively less attractive sector to invest :

Big Tech’s reset bolsters active investing: Yardeni​

The door has opened for active equity investors because the MegaCap-8 have “lost some of their mega and allure”, according to Yardeni Research.

“The MegaCap-8 benefitted from the pandemic. Their combined market capitalisation soared from $US5.3 trillion ($7.5 trillion) at the start of 2020 to peak at a record $US12.3 trillion on December 27, 2021. Over this period, their share of the S&P 500’s market capitalisation rose from 16.8 per cent to 25.7 per cent.
“Since their peak, the MegaCap-8’s collective market cap has dropped $US4.2 trillion to $US8.1 trillion during the January 27 week, and together they now account for 21.0 per cent of the S&P 500’s capitalisation.”

“The outperformance of the MegaCap-8 during 2020 and 2021 can partly be explained by the massive net inflows into equity ETFs and net outflows from mutual funds during this period. Active equity managers tend to diversify their portfolios.”

 

[Dona Ferentes]

FANG, and FAANG for that matter is dead; long live FAATMAN (Facebook, Apple, Amazon, Tesla, Microsoft, Alphabet and NVIDIA)

New kid on the block is doing all the lifting:

Overnight, chipmaker Nvidia was up a massive 27 per cent and is close to becoming a $US1 trillion ($1.5 trillion) company as booming demand for artificial intelligence hardware sent its shares soaring.

It pushed up other tech stocks:

• Microsoft +3.7%
• Alphabet +2.3%
• Advanced Micro Devices +10%
• Micron +3.9%
• Broadcom +6%

Nvidia is in the Top 5 capitalised stocks in the world.

....after highs in 2021 nudging $20, went as low as $10 by the end of last year (some distributions along the way), YTD has seen a healthy rebound

(and, good tip for C23 comp, @Iggy_Pop)

 

[peter2]

@Iggy_Pop and DF were onto this one. Now at new all time highs.