Specialist fund manager ETF Securities has modified the underlying assets in its technology company investment offering for the first time since its inception in March 2020.
Specifically, the investment house selected Microsoft to replace social media company Twitter in its FANG+ exchange traded fund (ETF) trading under the FANG code on the Australian Securities Exchange.
According to ETF Securities, Twitter has been removed from FANG+ after the company experienced volatile share prices, including a 12 month high of US$77.63 in March before decreasing by 40 per cent to approximately US$44.
The FANG+ ETF provides exposure to a concentrated portfolio of leading global technology companies by tracking the FANG+ index on the New York Stock Exchange and ETF Securities head of product Evan Metcalf said Twitter had not matched the growth of the other stocks in the index since chief executive Jack Dorsey stepped down in November last year.
ETF Securities head of product Evan Metcalf said Twitter no longer coincided with FANG’s objectives, and he attributed the company’s lack of growth compared to other stocks offered by the fund to the departure of Dorsey. In contrast, he acknowledged Microsoft chief executive Satya Nadella’s stewardship had transformed the organisation from a mature tech stock to a tech innovator.
“Microsoft operates the world’s second largest cloud computing business, Azure, which has been growing revenue above 40 per cent a quarter and has topped analysts’ estimates for the past three years,” Metcalf noted.
“The company is laying the foundations to move gaming into a cloud based service, with its Xbox Series S designed to feature digital downloads and cloud gaming. With its continued investment in future technologies, Microsoft has become eligible to feature in FANG as one of the world’s leading technology innovators.”
The ETF Securities FANG portfolio is now comprised of Facebook (Meta), Apple, Amazon, Google (Alphabet), Tesla, Nvidia, Netflix, Alibaba, Baidu and Microsoft shares.
The fund has returned 38.9 per cent in the previous 12 months since the end of November 2021 and the index is up 47.4 per cent per year over the past three years.''