The SOCL ETF: Social Distancing through Social Media | ETF Trends

Social distancing might be the buzzword of 2020, but don’t forget about social media. The sector has been a strong performer with its resurgence this year, giving funds like the Global X Social Media ETF (SOCL) strong gains.

SOCL seeks to provide investment results that correspond generally to the price and yield performance of the Solactive Social Media Total Return Index. The index tracks the equity performance of the largest and most liquid companies involved in the social media industry, including companies that provide social networking, file sharing, and other web-based media applications.

SOCL gives investors:

  • Efficient Access: Efficient access to a broad basket of social media companies around the world.
  • Targeted Thematic Exposure: The fund is a targeted thematic play on the global social media industry.

SOCL has familiar names: Twitter, SNAP Inc, and Facebook. SNAP alone is up over 200% and accounts for 20% of the fund’s holdings as of December 15.

Can social media repeat its banner year in 2021?

“We stand on the brink of a much-anticipated new year,” a Marketing Week article said. “Vaccines are rolling out, positive change is inching forward in areas of racial equality and climate action, and it’s fair to say that most people are feeling cautiously optimistic about 2021. For marketers, 2021 planning will look a little different than in previous years. While it is true that change is constant in marketing, 2020 shook up the field so dramatically that many marketers are revisiting everything from personas and buyer journeys to brand purpose.”

Despite the challenges, SOCL is up over 75% year-to-date.

SOCL Chart

Social Media Undercutting Other Forms of Advertising?

As more businesses look to recover from the economic effects of the pandemic, one of the prominent trends will be a resurgence in social media, due to its relatively low cost as compared to other forms of advertising.

“One marketing discipline that rose back to prominence in 2020 is social media,” the Marketing Week article added. “It makes sense—as the world was forced to remain physically distanced, social media bridged the gap and kept us connected to family, friends, and the brands we love. Until earlier this year, most brands knew where they stood on social media. They had the right balance of engagement, listening, content, and advertising. However, once the pandemic hit, the rules of the game changed.”

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