The acronym FAANG was used to refer to five of the most well-known and
successful technology companies in the world: Facebook, Amazon, Apple,
Netflix, and Google (now Alphabet). But with a wave of excitement about new
innovations and technology a new name for the tech behemoths has emerged –
the FAANG+.
The equally weighted basket of ten tech stocks: Meta Platforms, Apple,
Amazon, Netflix, Microsoft, Alphabet, Class A, Tesla, Nvidia,
Salesforce.com, and Advanced Micro Devices is broadly described as FAANG+.
The FAANG+ aims to track the Solactive FAANG+ Index, minus fees, and
expenses. It intends to track the price movements of a portfolio of the
above mentioned ten stocks, which includes seven core stocks plus three
additional stocks representing the next largest, most liquid, tech-enabled
stocks listed in the U.S., which is updated annually.
These ten stocks are generally the most successful and influential
technology companies in the world. They are known for their strong
financial performance and their ability to continuously grow their business
at a steady rate. The companies are well known and have come to dominate
the tech industry over the past decade, with their products and services
being used by billions of people worldwide.
The FAANG+ stocks have had a significant impact on the tech industry and
the world at large. They have transformed the way people communicate, shop,
consume entertainment, and access information. The companies are also known
for their high levels of innovation, with each one pushing the boundaries
of what is possible in their respective fields.
A great way to get exposure to the technology industry as a whole is by
investing in FAANG+, as buying individual stocks could deprive investors
from sufficient diversification and exposes them to the individual company
performance.
One way to invest in FAANG+ stocks is through the newly launched Leverage
Shares FAANG+ ETP
that holds these ten stocks in equal weights. Another way to gain exposure
to FAANG+ is to use exchange-traded fund (ETF) that tracks the performance
of these companies. For instance, Leverage Shares US Tech 100 ETP tracks
the Invesco QQQ ETF, which is based on the Nasdaq-100 Index®. The Fund
under most circumstances, consist of all of stocks in the index based on
market capitalization, meaning that investors gain reasonably good exposure
to the FAANG+ stocks.
Source: TradingView
The FAANG+ stocks have outperformed significantly in 2023 and have enjoyed
a stunning rally on expected growth in artificial intelligence, with some
of the constituents such as Nvidia nearly tripling in value year-to-date.
The FAANG+ stocks are trading lower in August after a spate of strong
economic data caused investors to dial back expectations of rate cuts and
increased the prospects of another rate hike by the end of the year, which
drove up government bond yields.
FAANG+ has lost some of its shine this month as investors are concerned
with the massive earnings expectations from these companies, their current
valuations, and the red flags waving for tech stocks as the artificial
intelligence (AI) hype fades.
At present there is disagreement between investors whether the FAANG+
stocks are overvalued. Their proponents argue that their valuations are
justified based on their fundamental strength as businesses and the current
dip presents a good buying opportunity. On the other hand, sceptics argue
that, even with impressive business performance, the FAANG+ stocks’ prices
have become so expensive that it may be difficult to realize attractive
long-term profits from investing in them.
The Leveraged Shares FAANG+ ETP offer
investors the ability to strategically harness market exposure to the basket of ten market leaders.
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