FANG is an acronym for Facebook Inc. (FB), Amazon.com Inc. (AMZN), Netflix Inc. (NFLX), and Alphabet Inc. (GOOGL). These companies represent a variety of different sectors, ranging from consumer cyclical to communication services to technology. But these stocks often are grouped together because they historically have been among the fastest-growing, most innovative and most successful large companies in the world. For investors seeking exposure to the FANG group without having to concentrate a portfolio in a few volatile stocks, an exchange traded fund (ETF) with exposure to the FANG stocks allows for greater diversification. These four companies have attracted intense interest from investors as technology has driven their growth in areas such as e-commerce, mobile devices, cloud computing, and streaming entertainment.
- FANG stocks dramatically outperformed the broader market in the past year.
- FANG stocks ETFs with the best 1-year trailing total return are XNTK, QQQ, and IGM.
- The top holdings of these ETFs are Tesla Inc., Apple Inc., and Apple, respectively.
Despite its popularity and wide use among investors, the acronym "FANG" may be a bit out of date because Google has since renamed itself as Alphabet in recent years. Further, Apple Inc. (AAPL) is often added to create a five-stock group, thus becoming the term FAANG. And some investors and analysts have added Microsoft Corp. (MSFT) to make six-stock group called FAAMNG, or the FAAMNGs. Given the variety of sectors represented by the FANG stocks, there is no single benchmark. However, all four of these stocks have dramatically outperformed the broader market in the past year. While the S&P 500 has a 1-year trailing total return of 23.8%, Alphabet has posted a total return of 41.2%, Facebook 65.2%, Netflix 81.3%, and Amazon 94.5%.
When it comes to investing in FANG stocks ETFs, there are 22 funds with good exposure to these four companies along with other stocks, excluding leveraged and inverse funds as well as those with under $50 million in assets under management. The best performing FANG stock ETF currently is the NYSE Technology ETF (XNTK). Below, we'll look at the top 3 FANG stocks ETFs as measured by 1-year trailing total returns. Note that all of these ETFs also provide exposure to Apple and Microsoft. Together, these six stocks comprise a major share of the value of the S&P 500 and also of many ETFs. Performance figures above are as of August 27, and all other data are from August 30.
- 1-Year Trailing Total Return: 71.4%
- Expense Ratio: 0.35%
- Annual Dividend Yield: 0.44%
- 3-Month Average Daily Volume: 23,840
- Assets Under Management: $510.5 million
- Inception Date: September 29, 2000
- Issuer: State Street SPDR
XNTK is a large-cap growth fund focused on U.S.-listed technology stocks. The fund tracks the NYSE Technology Index, a group of 35 leading stocks in the Information Technology and Consumer Discretionary sectors. The top holdings of this fund include Tesla Inc. (TSLA), the electric car maker; Shopify Inc. (SHOP), the e-commerce company; and JD.Com Inc. (JD), the e-commerce business.
- 1-Year Trailing Total Return: 56.9%
- Expense Ratio: 0.20%
- Annual Dividend Yield: 0.56%
- 3-Month Average Daily Volume: 39,592,432
- Assets Under Management: $139.6 billion
- Inception Date: March 10, 1999
- Issuer: Invesco
The Invesco QQQ Trust tracks the Nasdaq 100 Index, which includes 100 of the largest domestic and international non-financial companies listed on the Nasdaq in terms of market capitalization. QQQ is structured as a unit investment trust (UIT) which offers a fixed portfolio as redeemable units to investors. The top holdings for QQQ include Apple, Microsoft, and Amazon.
- 1-Year Trailing Total Return: 51.5%
- Expense Ratio: 0.46%
- Annual Dividend Yield: 0.39%
- 3-Month Average Daily Volume: 64,356
- Assets Under Management: $2.9 billion
- Inception Date: March 13, 2001
- Issuer: iShares
IGM is a large-cap growth fund focused on U.S.-listed tech stocks. The fund holds nearly 300 tech-related stocks, ranging from small cap to mid cap, and tracking the S&P North American Technology Sector Index. The top holdings for IGM include Apple, Amazon, and Microsoft.