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Despite its popularity and wide use among investors, the acronym "FANG" may be a bit out of date because Google has since renamed itself as Alphabet. Further, Apple Inc. (AAPL) is often added to create a five-stock group known by the term FAANG. In addition, some investors and analysts have added Microsoft Corp. (MSFT) to make a six-stock group called FAAMNG, or the FAAMNGs.
The sectors for each of these companies provide a rough benchmark for comparison to the broader U.S. market, also illustrating their divergent characteristics. Facebook, Netflix, and Alphabet are in the communication services sector, which has posted a 24.1% 1-year trailing total return, as measured by the performance of the Communication Services Select Sector SPDR ETF (XLC). Amazon is in the consumer discretionary sector, which has a 1-year trailing total return of 28.1%, based on the Consumer Discretionary Select Sector SPDR ETF (XLY). And Apple and Microsoft are in the tech sector, which has posted a 1-year return of 40.3% as measured by the Technology Select Sector SPDR ETF (XLK). All three of those sectors have outperformed the S&P 500's 18.4% 1-year trailing total return.
When it comes to investing in FANG stocks ETFs, there are 22 funds that trade in the U.S. with good exposure to these four companies along with other stocks, excluding leveraged and inverse funds and those with under $50 million in assets under management. The best performing FANG stocks ETF is the NYSE Technology ETF (XNTK). Below, we'll look at the best 3 FANG stocks ETFs as measured by 1-year trailing total returns. Performance figures above are as of November 16, and all other data are from November 17.
- 1-Year Trailing Total Return: 61.7%
- Expense Ratio: 0.35%
- Annual Dividend Yield: 0.37%
- 3-Month Average Daily Volume: 28,998
- Assets Under Management: $529.4 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; the Sponsored Class A ADRs of JD.Com Inc. (JD), the e-commerce business; and the Class A shares of Shopify Inc. (SHOP), the e-commerce company.
- 1-Year Trailing Total Return: 45.6%
- Expense Ratio: 0.20%
- Annual Dividend Yield: 0.56%
- 3-Month Average Daily Volume: 48,446,128
- Assets Under Management: $137.9 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: 42.6%
- Expense Ratio: 0.46%
- Annual Dividend Yield: 0.39%
- 3-Month Average Daily Volume: 58,183
- 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, making it one of the most diverse portfolios among FANG stocks ETFs. It tracks the S&P North American Technology Sector Index, which includes companies in the information technology sector broadly and in the internet and direct marketing retail, home entertainment, and media and services industries more specifically. The top holdings for IGM include Apple, Microsoft, and Amazon.
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