The four-day surge in Google Inc (NASDAQ: GOOG) (NASDQ: GOOGL) of nearly 9 percent has been a tremendous boost to exchange-traded funds that track Internet companies; Google recently hit its highest levels in two months ahead of its upcoming quarterly earnings report after the market close on Thursday.
First Trust Dow Jones Internet
The combination of Google’s two share classes represents over 10 percent of the underlying asset allocation in the First Trust DJ Internet Index Fund (ETF) (NYSE: FDN). This ETF tracks 42 publicly traded companies engaged in social media, online commerce, search engines and other Internet-related business.
FDN is the largest Internet-focused fund with over $3 billion in total assets and has jumped more than 13 percent so far this year. That performance stands in marked contrast to the relatively tepid 3 percent gain in the sector benchmark Technology SPDR (ETF) (NYSE: XLK).
It’s no surprise that FDN has shown strong momentum this year given the recent all-time highs reached by Amazon.com, Inc. (NASDAQ: AMZN), Facebook Inc (NASDAQ: FB) and Netflix, Inc. (NASDAQ: NFLX). All three companies are represented in the top holdings of FDN.
PowerShares NASDAQ Internet
Another fund that has benefitted from the solid Internet trend is the PowerShares NASDAQ Internet Portfolio (PowerShares Exchange-Traded Fund Trust (NASDAQ: PNQI)). This ETF tracks a basket of 100 global companies that include firms such as salesforce.com, inc. (NYSE: CRM) and Baidu Inc (ADR) (NASDAQ: BIDU). In addition, GOOG makes up 8 percent of the total portfolio.
PNQI has jumped nearly 12 percent so far this year after rebounding from a sharp drop in late June. This index is now poised to breakout above its recent top, which would be a strong vote of conviction for many of the global stocks that make up its portfolio.
Ark Web X.0
Lastly, the Ark Web X.0 ETF (ARK ETF Trust (NYSE: ARKW)) is an actively managed portfolio of Internet stocks worth noting as well. This relatively new fund debuted in late-2014 and has a unique basket of 43 holdings that include online security, social media and e-commerce websites.
ARKW has the ability to selectively adjust its underlying portfolio according to the fund manager's' outlook and expertise in security selection. This ETF has gained more than 13 percent this year as well.
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