Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
Microsoft replaces Twitter in the FANG+ ETF
Microsoft (NASDAQ:MSFT) is back. The 46-year old, $2.3 trillion-dollar company has had its status raised back to FANG rank, taking the place of Twitter (NYSE:TWTR) in the Intercontinental Exchange NYSE FANG+ index. ETF Securities FANG+ ETF (ASX:FANG) was quick to make the change, replacing Twitter in the first reconstitution of the fund since it was launched in March 2020.
The ETF Securities FANG+ stock portfolio now includes the following companies:
These above list of tech giants are all listed on major US stock exchanges, either on the NASDAQ or NYSE as shares or American Depositary Receipts (ADRs). Interestingly the FANG+ stocks are valued at more than three times the value of the S&P/ASX 200.
Microsoft’s 46-year journey has seen the company transform from an innovator and pioneer to a mature tech business and now back to a tech innovator, under the control of Satya Nadella, who became CEO in 2014. ETF Securities’ head of product, Evan Metcalf, says “Microsoft operates the world’s second-largest cloud computing business, Azure, which has been growing revenue above 40% a quarter and has topped analysts’ estimates for the past three years.”
The release of Windows 11 brought big changes to the Microsoft Store and the Microsoft brand. The biggest of them all is that Win32 applications are allowed to be uploaded and offered via the Store.
Metcalf agrees, saying “the company is laying the foundations to move gaming into a cloud-based service, with its Xbox Series S designed to feature digital downloads and cloud gaming. With its continued investment in future technologies, Microsoft has become eligible to feature in FANG as one of the world’s leading technology innovators.”
So why was Twitter removed?
Metcalf says “Twitter was removed because it was deemed to no longer sit on par with the other companies in the Index. It has not matched the growth of other FANG stocks during the six-year tenure of Chief Executive Jack Dorsey, who stepped down at the end of November. Twitter’s share price has been volatile, reaching a 12-month high of US$77.63 in March before falling more than 40 per cent to its current level around US$44.”
All in all, the ETF FANG has returned 38.9% over the 12 months to the end of November. The Index is up 47.4% a year over the past three years, and has been a popular investment option for investors looking for tech exposure. The ETF tracks the NYSE FANG+ Index, which provides exposure to a concentrated portfolio of global innovation leaders in tech and tech-enabled sectors.
