Big tech’s heavy-hitters like Facebook, Amazon, Netflix, and Google powered investors through the global pandemic, putting the spotlight on leveraged tradable ETFs like the newly launched Direxion Daily Select Large Caps & FANGs Bull 2X Shares (FNGG).
FNGG gives traders targeted exposure to the FANG stocks without having to hold separate positions in each stock. Furthermore, with double the leverage, traders can amplify their gains should their bets prove correct.
FNGG seeks to achieve 200% of the daily performance of the ICE FANG 20 Index, which provides exposure to highly-traded technology and technology-enabled companies, such as the aforementioned FANG stocks. As of September 10th, 2021, constituents of the ICE FANG 20 Index had a median total market capitalization of $155 billion.
“Originally conceived as four transformative, high growth stocks – Facebook, Amazon, Netflix and Google (now known as Alphabet) — Apple (AAPL) and Microsoft (MSFT) quickly joined the fold due to their ‘FANG-like’ qualities. The ICE FANG 20 Index includes these six stocks, along with 14 others carrying similar characteristics, including high average daily volume, high sales growth and the premium that market is placing on the businesses,” said David Mazza, managing director and head of product at Direxion. “FNGG allows traders to take a bold position in a basket of 20 well-known, highly-traded growth stocks across the Technology, Media & Communications and Consumer Discretionary sectors.”
FANGs Versus the Nasdaq 100
The Nasdaq 100 is showing its strength so far this year with a 15% gain. Big tech stocks like the FANGs have powered investors through the global pandemic, gaining strength as core businesses and consumers relied more heavily on technology.
Social distancing measures in particular fueled the use of the internet in order to purchase goods and services. This helped the case of the FANGs even further until they got doused with a heavy dose of volatility, thanks to investors fretting over rising yields.
In addition, other headwinds like inflation could tamp down further growth prospects. Nonetheless, it’s difficult to bet against a winner like big tech over the long run, especially when big tech was also the main tailwind that powered the decade-long bull run just prior the pandemic.
In the aggregate, the FANGs have produced a return of about 24% this year. That’s still better than the Nasdaq 100, despite uncertainty heading into 2022.
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