Facebook Pulls SOCL Higher
October 24, 2012
Facebook’s shares rose Wednesday nearly 20 percent, and the move that stemmed from success the social media company was having in expanding its presence on mobile devices was pulling up a handful of exchange-traded products as well.
At least three ETFs allocate 2 percent or more of their portfolios to Facebook, with the Etracs Next General Internet ETN (NYSEArca: EIPO) leading the pack with a 10.68 percent allocation. Another ETP with a sizable Facebook position is the Global X Social Media Index ETF (NYSEArca: SOCL), with a 5.7 percent weighting.
Exposure to Facebook was enough to push SOCL’s price up 2.3 percent, as the company Mark Zuckerberg founded was on its way to its largest one-day gain since it went public in May. The spike came after it reported better-than-expected mobile advertising sales numbers. EIPO also followed the upward momentum throughout Wednesday's session, but turned lower near the end of the day to close down 1.5 percent.
By now, SOCL is no stranger to wide price swings, given that Facebook—its largest holding—has had anything but a smooth ride since it came to market. In the past month, Facebook stock has gained more than 13 percent, but the company’s shares still remain more than 37 percent off their price since the initial public offering.
Since SOCL added Facebook to its portfolio on May 24, the fund has lost some 6.8 percent of its value, trading with choppiness along the way. Wednesday’s price action—if also part of the broader volatility—was positive for ETF, which had $13.25 million in assets, according to data compiled by IndexUniverse.
The upward momentum in the stock was also boosting other funds, such as the all-cap equities Elements Morningstar Wide Moat Focus ETN (NYSEArca: WMW) and the $68 million Market Vectors Wide Moat Research ETF (NYSEArca: MOAT).
WMW allocates 5.3 percent to Facebook stock, and was up less than 1 percent on Wednesday, while MOAT gave up most of its early-session gains to close only 0.05 percent higher. MOAT’s allocation to Facebook is currently pegged at 4.8 percent.
To put those performances in perspective, the Dow Jones industrial average traded only marginally higher Wednesday but closed 0.2 percent lower.
Facebook was most recently added to the Nasdaq Q-50 Index—the feeder index for the Nasdaq 100—in September. But the benchmark, which is designed to track the performance of the 50 stocks that would be next in line for inclusion in the Nasdaq 100 Index, appears to have no ETFs attached to it.
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