Given the innovation and success of many tech giants, it’s understandable why investing in the tech sector is so appealing. Growth for the largest companies such as Facebook, Amazon, Netflix and Google has been impressive, beating out all the major market indices, but stock performance for tech companies can be volatile. This is one reason why FANG investing, or the investment in Facebook, Amazon, Netflix and Google stocks, is getting attention.
Although the stock prices have fluctuated more dramatically for some of these companies than others, they all have experienced significant growth over time. In fact, a recent Goldman Sachs research report found that underrepresentation of hot FANG stocks is a potential reason reason why the S&P 500 outperformed 73 percent of large-cap mutual funds in 2015.
A recent Forbes article highlights why some investors find investments in FANG stocks attractive. Investors can focus their sights on mutual funds with a high portfolio weighting of FANG, while still receiving the benefits of portfolio diversification and professional management of a mutual fund.
“Companies like Facebook, Amazon, Netflix, Google — and Chipotle, Apple, EMC, Ultimate Software, Tesla and Qualcomm just to name a few others — are growing,” said Adam Hartung of Forbes. “They are firmly tied to technologies and products that are meeting emerging needs, and they know their customers. They are doing things that increase long-term value.”
Apart from tech mutual funds, interested investors can also focus their sights on FANG-specific funds when selecting a mutual fund.
Credio identified mutual funds with over 15 percent weighting in Facebook, Amazon, Netflix or Google stocks. The top 20 funds were then ranked based on five-year returns. We then narrowed the list to only include funds that:
The average expense ratio for all mutual funds that hold FANG stocks is 1.17 percent, and all 20 of these funds have expense ratios lower than that average.
Read the article on Credio
Christina Lavingia is an Editorial Lead at Graphiq. She manages the editorial calendar and freelance team, and edits copy. She also writes for Credio, HealthGrove and FindTheHome while trying to keep a pulse on developments in Graphiq's verticals. What's going viral? What do readers find engaging? In her spare time she's a Ted Talk enthusiast, Skimmer and SF Giants fan.