The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) -- There are plenty of analysts who have questioned whether
(GOOG - Get Report)
can sustain a double-digit growth rate going forward.
Yet the tech giant's 32% revenue burst in the current quarter not only quieted the naysayers, it sent share prices up 13% in a single trading session.
Not sure about those annoying click-through links? The average price paid per click on Google's network rose 12% over last year. Don't believe that the Google+ social networking plan can compete with Facebook? "G Plus" brought in 10 million newbies in its first two weeks!
Granted, the ultimate Internet information provider is still 6% below 2011 highs and roughly 23% off of its October 2007 peak. That said, those who declared Google a dinosaur may have been premature.
Here are seven of the more popular tech ETFs with their applicable Google weightings:
Based on the higher performance figures for Internet-related ETFs, one might leap to the conclusion that Google exposure had been a big reason for the boost. In actuality, Google gained 30% year over year, whereas FDN and PNQI packed on 46% and 52%, respectively. Even the Nasdaq 100 proxy,
PowerShares QQQ Trust Series
has had a slight edge.
Google shares have been far more volatile than any of the above-mentioned ETFs over the past five years. Moreover, investors often prefer ETFs as a way of diversifying away from single stock risk.
It follows that if Internet stocks scare you, you might not want to travel the subsector path; both FDN and PNQI have a great deal riding on Google,
On the flip side, exactly one year ago to the day, I offered,
"Three ETFs With Trend-Busting Street Credentials."
In the July 15, 2010 feature, I explained why First Trust Internet was on my "buy list."
Naturally, investing in an Internet ETF requires some belief in a 2.0 wave. Yet, more importantly, you need to manage your downside risk with stop-limit loss orders. Without an exit strategy, the most devout believer shrinks like a violet in a garden of roses.
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