Obviously, the internet has played a vital role during the coronavirus pandemic as a way to facilitate communications amid social distancing laws and lockdown measures. As such, one internet ETF, the First Trust Dow Jones Internet Index Fund (FDN), has been outperforming broad market heavy hitters like the Invesco QQQ ETF (NASDAQ: QQQ).
FDN seeks investment results that correspond generally to the price and yield (before the fund’s fees and expenses) of an equity index called the Dow Jones Internet Composite Index (SM) (the “index”). The fund will normally invest at least 90% of its net assets (including investment borrowings) in the common stocks that comprise the index.
Furthermore, the index is designed to measure the performance of the largest and most actively traded securities issued by U.S. companies in the Internet industry. The index is a composite of its two sub-indices, the Dow Jones Internet Commerce Index and the Dow Jones Internet Services Index.
When the markets are fed heavy servings of volatility, it helps to have liquidity when it comes to ETFs. For the self-styled ETF tactician, one of the best funds for liquidity is the SPDR S&P 500 ETF (NYSEArca: SPY), which FDN has also been outdoing lately.
Per a MarketWatch report, here are some key points highlighting the ETF’s outperformance as of late:
- “The chart shows that when the stock market dropped, the internet ETF outperformed the Dow by about 16%.
- The chart shows that during the recent rally, the internet ETF has outperformed the Dow by about 27%.
- In the market rally, the Nasdaq 100 ETF has been the star performer. However, the internet ETF has outperformed the Nasdaq 100 ETF by about 5.5%.
- The chart shows that the internet ETF fell in the Arora buy zone during the market drop, giving investors an excellent opportunity. Those investors are now sitting on about a 32% profit.
- The reason that the internet ETF has outperformed is that its stock holdings include Amazon, Facebook, PayPal, and Netflix.”
Investors wanting broad exposure to the Dow Jones Industrial Average can look to the SPDR Dow Jones Industrial Average ETF Trust (DIA). DIA seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Dow Jones Industrial Average (the “DJIA”).
The Trust seeks to achieve its investment objective by holding a portfolio of the common stocks that are included in the DJIA (the “Portfolio”), with the weight of each stock in the Portfolio substantially corresponding to the weight of such stock in the DJIA.
For more market trends, visit ETF Trends.