Much like its momentum counterparts, such as the iShares Nasdaq Biotechnology ETF (NasdaqGM: IBB) and the First Trust Dow Jones Internet Index Fund (NYSEArca: FDN), the Global X Social Media Index ETF (NasdaqGM: SOCL) suffered a real drubbing late in the first quarter and into the early part of the second quarter.
And much like other momentum ETFs, SOCL has come roaring back, though unlike its biotech rivals, the recent surge in the social media ETF has gone on without much fanfare. That is something of an odd scenario when considering SOCL is home to some of the most beloved and heavily traded Interet stocks.
It is all the more curious when noting that since its May 7 trough, SOCL has surged 25.1%, more than enough to put the ETF into a new bull market. FDN, the largest Internet ETF, is up 18% over the same period. [Sort of Social Media Rebound]
Dragged lower by a plethora of offenders, including China’s Tencent Holdings, LinkedIn (NYSE: LNKD), Yelp (NYSE: YELP) and Twitter (NYSE: TWTR), experienced a March peak to May trough decline of 28%, enough to easily put the ETF in bear market territory.
As investors familiar with Internet and social media stocks well know, things can change on a dime with these names. Fortunately for SOCL, the recent changes have been for the better as the average gain for those four stocks over the pats 90 days, a period in which SOCL has climbed 14.6%, is nearly 36%. That quartet combines for over a third of SOCL’s weight.
SOCL’s positive reversal of fortune is all the more stunning when considering that during a 21-day stretch starting in March and lasting into early April, the ETF finished lower in 17 of those trading sessions. [Social Media ETF Flirts With Bear Market]
Still, investors appear to be taking a “once bitten, twice shy” view of SOCL. Although the ETF is up 3.5% since the start of the third quarter, it has lost nearly $8.6 million in assets. That after the ETF hauled in $100 million of its nearly $145 million in assets under management last year.