Topic: How To Invest

Q: COVID-19 seems to be benefitting Internet-based firms ready to capitalize on any sharp rise in demand because of our social distancing efforts. Pat, can I get an opinion on The First Trust Dow Jones Internet Index Fund ETF? How does it compare to the broader Nasdaq-focused Invesco QQQ ETF?

Article Excerpt

A: The First Trust Dow Jones Internet Index Fund ETF, $145.22, symbol FDN on New York (Units outstanding: 56.1 million; Market cap: $8.1 billion; www.ftportfolios.com) aims to track the Dow Jones Internet Composite Index. For a stock to be considered for a spot in the index, the company must generate at least 50% of its annual sales/revenues from the Internet. Other criteria include a market capitalization of at least $100 million, a share price above $10 if it is not currently in the index, and adequate liquidity. This $7.0 billion ETF has a reasonable MER of 0.52%. Its top holdings are Amazon.com, 11.0%; Alphabet, 8.8%; Facebook, 6.6%; Netflix, 6.1%; Cisco Systems, 5.4%; Salesforce.com, 5.0%; PayPal Holdings, 4.7%; Veeva Systems, 3.1%; and eBay, 3.0%. The industry breakdown is Information Technology, 48.2%; Communication Services, 27.4%; Consumer Discretionary, 18.2%; Financials, 3.2%; and Health Care, 3.1%. The Invesco QQQ ETF, $215.21, symbol QQQ on Nasdaq, holds stocks that represent the Nasdaq 100 Index. They include the exchange’s 100…

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