The New Social Media ETF’s Interesting (and odd) Composition (SOCL, SINA, NTES, GOOG, YNDX, RENN, GRPN, LNKD, UNTD)

These ETF products which trade in the U.S. but are composed of a bunch of internationally listed shares are often a bit sluggish on their trading.  Now we have a new ETF that may hit home for much of the younger generation and those looking for “an in” into the internet’s growth… Here comes a SOCIAL MEDIA ETF!  Global X Funds is now launching the Global X Social Media Index ETF (NASDAQ: SOCL).

The Global X Social Media Index ETF tracks the Solactive Social Media Index, and the three largest components in the underlying index are DeNA Co., Sina Corp. (NASDAQ: SINA) and Netease.com Inc. (NASDAQ: NTES) at 10% exposure each.  Other components are Google Inc. (NASDAQ: GOOG) at 4.75%, Yandex N.V. (NASDAQ: YNDX) at 4.75%, Renren Inc. (NASDAQ: RENN) at 4.75%, and Groupon, Inc. (NASDAQ: GRPN) at 4.75%. Other components in the Solactive Social Networks Index which were not given up by name nor by weighting come to 28.15% and two of the names shown on the Solactive breakdown that were not identified by Global X were LinkedIn Corporation (NYSE: LNKD) and United Online Inc. (NASDAQ: UNTD).

This is the first ETF of its kind with a focus on social media companies.  The aim of the ETF is to includes companies “from all over the world that provide social networking, file sharing, and other web-based media applications.”

We won’t bother sharing the growth figures because you have already heard them in some iteration or another.   The index will be adopting new companies as they come public and it even noted that it will “capture these new companies shortly after their public debut.”

The international country exposure is as follows:

• China 36.28%
• United States 26.22%
• Japan 19.95%
• Russia 9.55%
• Germany 2.28%
• “other” 5.65%

Does it seem a bit odd that China is the leading nation in social media’s weighting here considering that the powers that be in China restrict more web usage compared to Western nations?  That may change after Facebook comes public but it is a bit difficult to fathom today.

Needless to say, this is not an ETF which is suitable for widows and orphans.

JON C. OGG