The broad category Internet is still one of the fastest growing sectors in a world of relatively slow economic and corporate growth.  Many of the stocks in this group are volatile and some are high-priced on a real dollar basis, making them pricey for the individual investor to buy more than a few shares or options on them.

Let’s examine the current situation for exchange traded funds (ETFs) in regards to internet stock names, as ETFs often offer a lower share price with low expense fees, as well as options trading for leverage, diversification and strategy.

The most liquid ‘pure’ internet ETF is First Trust Dow Jones Internet Index Fund (FDN).  This ETF trades around 600k shares a day volume (via, but its options still don’t have a lot of open interest at this point in general (and the bid/ask spreads that are quoted by market makers on its options are fairly wide, although the ‘real’ market is likely narrower.  Hopefully and likely the liquidity on FDN and other focused ETFs will grow over time, which will benefit retail investors & traders with smaller bid/ask spreads and better pricing and fills in general.  The expense ratio of FDN is 0.53%, according to Yahoo Finance

The current top holdings in FDN as of 10/30/15 (from

Amazon (AMZN) – 11.1% of assets
Facebook (FB) – 10.3%
Alphabet Class A (GOOGL) – 5.4% (CRM) – 5.3%
Alphabet Class C (GOOG) 5.3%
Netflix (NFLX) 5.1%
PayPal (PYL) 4.7%
LinkedIn (LNKD) 4.3%
Yahoo! (YHOO) 4.2%
eBay (EBAY) 4.1%

These Top 10 holdings account for 50% of assets, and no other holding is above 3% of assets.  If you combine the 2 Google Alphabet positions, the biggest 3 holdings of AMZN, FB, GOOGL/GOOG account for 32% of the ETF, a fairly large concentration in just 3 names.  Something to be aware of if you invest or trade in this security.  Expense ratio is 0.53%, according to Yahoo Finance. 

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