Facebook, Apple, Amazon, Netflix and Google

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Facebook, Apple, Amazon, Netflix and Google (FAANG), a further extension of FANG (which originally did not include Apple), is both an acronym and a buzzword to entice investors, as popularised by Jim Cramer from CNBC's Mad Money and other talking heads for grouping together currently high performance technology companies currently listed on NASDAQ.[1] While it usually refers to the five (or four) of these technology companies specifically, the term is now generally used to refer to the technology and consumer discretionary sectors consisting of highly-traded growth stocks of American technology and tech-enabled companies in recent years.[2] Such a perspective of the market demonstrates a huge impact with commensurate profit or loss.[3] Opinions have been divided over whether this phenomenon is indicative of a tech bubble or long-term sustained growth of these technology companies.[2]

In 2017, Intercontinental Exchange has initiated an index with this focus through the NYSE and extended FANG with Twitter, Nvidia and Tesla and with BAT stocks, the Chinese counterparts: Baidu, Alibaba and Tencent.[4][5][6][7] Investment analysts have often compared FAANG against or together with BAT stocks due to the latter's similar level of growth in the Chinese stock market.[8]

There are also actively managed ETFs, which attempt to take advantage of the phenomenon of these index-based funds, since indices don’t have the power to make adjustments on any given day. However, investors should be wary as an ETF may not be currently holding all of the implied tech company stocks. For example, the ETF known by ticker FNG, sold out of Facebook during the Cambridge Analytica scandal, but also dumped Apple holdings ahead of its earnings boost.[9]

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References[edit]

  1. ^ Grant, Kinsey (Sep 26, 2017). "FANG Stocks Are Getting Their Own Index". The Street.
  2. ^ a b Frankel, Matthew (29 September 2017). "What Are the FANG Stocks?". Motley Fool. Retrieved 11 August 2018.
  3. ^ Phillips, Matt (Mar 19, 2018). "Facebook and Other Tech Companies Drag Down Stock Markets". The New York Times.
  4. ^ Kapadia, Reshma (April 17, 2018). "The FANGs vs. the BATs: Which Is More Vulnerable to a Downturn?".
  5. ^ Wang, Lu (Nov 8, 2017). "FANG Lovers Get a New Way to Bet on Stocks With Futures Trading". Barrons.
  6. ^ Reiff, Nathan (Sep 27, 2017). "New Index to Track FANG Stocks Will Launch in November [2017]". Investopedia.
  7. ^ "NYSE to Launch FANG+ Options on June 4; Offers Efficient Hedging and Exposure to Basket of Key Tech Stocks". Press release. NASDAQ. May 23, 2018.
  8. ^ Wong, Jacky (13 October 2017). "BATs vs. FANGs: Why China's Tech Has Extra Risk". Wall Street Journal. Retrieved 15 August 2018.
  9. ^ Wilson, Carolina; Frier, Sarah (July 26, 2018). "'F' is for? This ETF is Named After FANGs and Holds No Facebook". Bloomberg.

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