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Should You Invest in the Global X Social Media ETF (SOCL)?

Sector ETF report for SOCL

By
This story originally appeared on Zacks

The Global X Social Media ETF (SOCL) was launched on 11/14/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Technology - Internet segment of the equity market.

- Zacks

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Internet is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.

Index Details

The fund is sponsored by Global X Management. It has amassed assets over $339.94 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Internet segment of the equity market. SOCL seeks to match the performance of the Solactive Social Media Total Return Index before fees and expenses.

The Solactive Social Media Index is designed to reflect the performance of companies involved in the social media industry, including companies that provide social networking, file sharing, and other web-based media applications.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.65%, making it on par with most peer products in the space.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Meta Platforms Inc (FB) accounts for about 10.34% of total assets, followed by Tencent Holdings Ltd and Snap Inc - A (SNAP).

The top 10 holdings account for about 62.62% of total assets under management.

Performance and Risk

Year-to-date, the Global X Social Media ETF has lost about -12.49% so far, and is down about -10.47% over the last 12 months (as of 12/28/2021). SOCL has traded between $52.14 and $78.16 in this past 52-week period.

The ETF has a beta of 0.93 and standard deviation of 28.02% for the trailing three-year period, making it a high risk choice in the space. With about 34 holdings, it has more concentrated exposure than peers.

Alternatives

Global X Social Media ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SOCL is a good option for those seeking exposure to the Technology ETFs area of the market. Investors might also want to consider some other ETF options in the space.

ARK Next Generation Internet ETF (ARKW) tracks N/A and the First Trust Dow Jones Internet ETF (FDN) tracks Dow Jones Internet Composite Index. ARK Next Generation Internet ETF has $4.09 billion in assets, First Trust Dow Jones Internet ETF has $10.16 billion. ARKW has an expense ratio of 0.79% and FDN charges 0.51%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.



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Global X Social Media ETF (SOCL): ETF Research Reports

 

Meta Platforms, Inc. (FB): Free Stock Analysis Report

 

ARK Next Generation Internet ETF (ARKW): ETF Research Reports

 

First Trust Dow Jones Internet ETF (FDN): ETF Research Reports

 

Snap Inc. (SNAP): Free Stock Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research