It has already been a wild year for the PowerShares NASDAQ Internet Portfolio (PNQI) – in a good way. Not only is the previously unheralded PNQI on the list of the 10 best-performing non-leveraged ETFs, the fund has pulled in almost $99 million of its $185 million in assets under management since the start of the year.
PNQI, which has surged 51.4% year-to-date, has been bolstered by resurgent Facebook (FB) and the strong balance sheets of Internet giants such as Amazon (AMZN) and Google (GOOG). Additionally, Internet ETFs have provided investors with shelter from the storm of rising Treasury yields as most brand-name Internet stocks have soared in the face of rising rates. [Internet ETFs: Rising Rates Shelter]
Then there has been the ebullience surrounding the upcoming initial public offerings for Alibaba and Twitter, which have given the Internet space a late 1990s feel. [Internet ETFs: Dot-Com Bubble Back?]
However, earnings reports are likely to chart the near-term course for PNQI and worth noting is that the ETF is home to some stocks that really move following their profit updates. In fact, no stock in the S&P 1500 moves more in the day following its earnings report than Netflix (NFLX). Its average one-day, post-earnings move is almost 14.5%, according to Bespoke Investment Group.
PNQI’s potential for big earnings season moves does not end with Netflix. Priceline.com (PCLN) is sixth on the list of S&P 1500 post-earnings movers with an average move of 12.9%. Priceline and Netflix are both top-10 holdings in PNQI, combining for 12.1% of the ETF’s weight. Other marquee Internet names held by PNQI eBay (EBAY) and Baidu (BIDU).
PowerShares NASDAQ Internet Portfolio
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of Amazon, Facebook and Google.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.