7 ETFs for Advisors Looking to Play Facebook<br><br>
Sure, everyone wants to own the hot new stock but many advisors and their clients are just as concerned about the potential downside risk.
Thats why ETFs are a very popular and viable option for advisors and clients looking to get in on the Facebook mania without putting all their eggs in one basket. Heres a look at seven prominent ETFs that are expected to add significant shares of Facebook to their portfolios in the near future.
Source: ETF Database
Global X Social Media ETF (SOCL)<br><br>
This fund will be one of the first (most likely the first) U.S.-listed ETF to include FB stock. The underlying Solactive Social Media Index will include new IPOs after just five trading days, meaning that FB should be included in SOCL within about a week of the IPO.
Expected Date for Facebook Inclusion: May 25
PowerShares QQQ (QQQ)<br><br>
The so-called seasoning period that new listings must endure before being added to the tech-heavy benchmark was recently shortened from one year to three months meaning that FB shares would be eligible for inclusion into the Nasdaq sometime in August. That could be an interesting stretch for FB stock; with some $50 billion in assets linked to the Nasdaq-100, the addition of the social media company will trigger a wave of repurchases.
Expected Date for Facebook Inclusion: Dec. 24
Technology SPDR (XLK)<br><br>
In order to make it into the S&P Technology Select Sector Index, a company must be included in the S&P 500. To make that cut, stocks must meet a number of different criteria. One of those is a 50% public float meaning that at least half of the companys shares must trade on a public exchange. Facebook wont come anywhere near that threshold with its IPO, as it is expected that the company will list only a fraction of its shares.
In all likelihood, fewer than 10% of all FB shares will be available to the public after the IPO, meaning that the company still has a long ways to go before it becomes a card-carrying member of the S&P 500. In other words, dont hold your breath to see Facebook in XLK.
Expected Date for Facebook Inclusion: Unknown and dependent on FBs public float.
ETRACS Next Generation Internet ETN (EIPO)<br><br>
Specifically, this index is rebalanced at the close of business on the first Tuesday of every month, meaning that the index should include FB stock when the opening bell rings on June 6.
As an interesting side note, the index to which EIPO is linked is market cap weighted but calculates market cap including all share classes regardless of who holds them. In other words, FB should get a pretty hefty weighting in this ETN, since there is no adjustment made to account for the fact that most shares will still be held by insiders after the IPO.
Expected Date for Facebook Inclusion: June 6
First Trust US IPO Index Fund (FPX)<br><br>
New IPOs are added to the underlying index after their seventh trading day.
Expected Date for Facebook Inclusion: May 29
PowerShares NASDAQ Internet Portfolio (PNQI)<br><br>
Expected Date for Facebook Inclusion: March 18, 2013
First Trust Dow Jones Internet Index Fund (FDN)<br><br>
Expected Date for Facebook Inclusion: September 24
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