Internet Software Space Boasts Impressive YTD Returns in XLK
Subsectors in XLK
In this series, we’ll analyze YTD (year-to-date) performance of subsectors in the Technology Select Sector SPDR ETF (XLK). As of September 14, 2015, XLK generated YTD returns of -2.20% to close at $40.36. In this series, we’ll analyze factors that are affecting the performance of Facebook (FB), Yahoo! (YHOO), and VeriSign (VRSN).
In the above chart, we can see that the Technology, Hardware & Storage subsector was the worst performing, generating YTD returns of -24.17%. It was followed by Semiconductor Equipment and Integrated Telecommunications at -23.94% and -15.35%, respectively.
Subsectors that have outperformed XLK include Specialized REITs, Internet Software & Services, and Home Entertainment Software. with YTD returns of 27.77%, 9.85%, and 45.38%, respectively.
In terms of individual stocks, Electronic Arts (EA) has generated maximum YTD returns of 45.38%, followed by Total Systems Services and Altera at 37.51% and 36.55%, respectively. Yahoo! (YHOO), Micron (MU), and SanDisk (SNDK) have generated YTD returns of -39.97%, -52.30%, and -43.53%, respectively.
WhatsApp inching closer to 1 billion users
In April 2015, Facebook’s (FB) WhatsApp announced it had surpassed 800 million users. In September 2015, it breached the 900 million user barrier. Mark Zuckerberg, CEO (chief executive officer) of Facebook, announced that he’ll consider monetizing the service when the number of users crosses the 1 billion mark. This will give Facebook yet another opportunity to grow its revenues.
Facebook’s total user base is currently 1.4 billion. That’s 20% of the world’s population. Exponential growth in user base seems unlikely. According to analysts, Facebook’s future growth will rely on marketing activities and increased user time. Facebook’s acquisitions, including WhatsApp Messenger, Instagram, and Messenger, will ensure that inorganic growth continues in the long term.
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