The Global X Social Media Index ETF (NasdaqGM: SOCL), the first exchange traded fund dedicated to social media stocks, is up 18% this year, but that does not mean the ETF’s upside from here is limited.
SOCL has been boosted this year by Facebook Inc. (NasdaqGS: FB) being one of the best-performing stocks in the S&P 500 and Microsoft’s (NasdaqGS: MSFT) purchase of LinkedIn (NYSE: LNKD), among other factors.
Microsoft is acquiring LinkedIn Corp. for $26.2 billion in one of the largest tech-industry deals on record as a way to integrate the networking site with Windows. That deal was announced in June.
Related: 46 Tech ETFs to Tap Into Big Growth Names
Recent ebullience towards tech and Internet ETFs is represents a rapid reversal of fortune. Just a few weeks ago, investors were worried about the impact Brexit could have on technology, the S&P 500’s largest sector allocation.
[related_stories]“A fund of this nature is likely to be used as more of a small tactical theme rather than a core holding. It can be used to focus the technology exposure in your ETF portfolio toward some of the largest social media companies in the world. This may be preferable to the hit-or-miss proposition of choosing individual stocks for some investors,” according to InvestorPlace.