SOCL – Global X Releases New Social Media ETF

Global X Media ETF (SOCL) is the newly released hot ETF hoping to track the index and profits of publicly traded social media companies. Many feel that the future of the internet, advertising, and communication lies in social media. Thus this ETF is extremely appealing. Yet, some may be scratching their heads when they realize Facebook and Twitter are not there. Is it worth investing in?

(SOCL) is an excellent way to get some exposure to a variety of social media companies, China being the most represented with Baidu (BIDU), Sina (SINA), Netease (NTES), and Tecent Holdings. Other powerful social media companies include Yandex (YNDX) and Mail.RU Group. Behind China at 36.92% of the fund is the United States at 26.31%, followed by Japan, Russia, Germany, India, Tiawan, Italy, and the UK. Not only does this ETF give you excellent exposure to social media, it gives great international exposure.

Global X Media is a smaller ETF and fund operator compared to the usual SPYDR and iShares ETFs. Thus it is a little bit more expensive to own at 0.65% per year. Similarly, some analysts have argued that the top four holdings are far too volatile and that composing this ETF with China as the biggest holding is more risky than worthwhile.

Social media in the United States is of particular interest in the (SOCL) ETF. One thing that concerns me, to no fault of Global X is the lack of Facebook and Twitter in the fund, arguably the two most powerful social media companies. This is because an ETF can only represent publicly traded companies by law and when it comes time for those two to become public Global X will have to buy them at a premium IPO price. This can be problematic for making money. As well on the domestic side I concerned with having Groupon (GRPN), Pandora, and Linkedin (LNKD) lead the charge. I have little faith in the three companies on their own. However, an ETF is for making your investments a bit more conservative.

Google (GOOG) and Baidu are two really great social media I like in the (SOCL) ETF. I have always wanted to get my piece of Google and Baidu but they are such expensive stocks that it is hard for a youthful investor to invest in them. Jim Cramer continues to recommend these two almost on a daily basis at Mad Money. However, with this ETF which is trading at $14.33 a share at writing I can get exposure to both at a fraction of the cost. As well, if one of those social media companies that I think are a dud takes off I can be thankful to own them in the ETF.

(SOCL) is going to be a hard ETF to guage for success.It has some of the elements for profit but the absence of certain social media like Facebook and Twitter, along with the odd majority percentage domestic holdings like Groupon has the ability to shut it down. If you like the exposure buy this, but remember many individual social media companies are just as affordable on their own and if you believe in their models for growth,buying individual shares of Pandora (P), Yandex, Baidu, Linkedin, and Groupon may make more money for you.

I usually do not recommend ETF’s nor have I personally invested in them because they are more of a conservative play often with less growth and profit compared to individual stocks. But if you love social media and cannot decide which one to invest in, (SOCL) may be the perfect vehicle for you. It also offers you some added diversification if your portfolio holds no tech or internet companies. It is affordable, it owns some of the biggest social media available, and will continue to pick up the best social media companies that become public.

Tagged Baidu, ETF, Global X, Google, Groupon, Linkedin, Netease, Pandora, Sina, Social Media, SOCL, Tecent Holdings, Yandex