Microsoft is set to acquire LinkedIn for $26.2 billion, in a deal that sent LinkedIn share prices up 47% in early trade and buoyed a handful of ETFs that own stocks of the social media firm.
The biggest allocation to LinkedIn in an ETF wrapper is in the Global X Social Media Index ETF (SOCL | B-47), at 11%. The $63 million fund saw its share price rally nearly 5% on the heels of the deal announcement.
The uptick is significant if you consider that SOCL is up only 2.9% year-to-date, underperforming the broad stock market as measured by the SPDR S&P 500 (SPY | A-97):
Launched in 2011, SOCL remains the only ETF on the market to focus exclusively on social media companies. But it’s not the only fund to offer exposure to LinkedIn.
The First Trust Dow Jones Internet ETF (FDN | A-58) was rallying 1.3% in early trade, thanks in part to its 3% allocation to LinkedIn. FDN is a veteran of sorts in this space, having come to market 10 years ago. Today, it's a $3.2 billion-in-assets portfolio.
The fund focuses on internet companies—names like Amazon, Facebook and Alphabet, formerly known as Google.
So far this year, FDN remains in red territory:
Another ETF where LinkedIn can be found isn’t a tech-linked fund necessarily. The VanEck Vectors Morningstar Wide Moat ETF (MOAT | A-66) holds LinkedIn among its equally-weighted 21 securities, with an allocation of 5.25%. MOAT shares, too, were up more than 2% early Monday.
This ETF sets out to own only firms deemed—based on Morningstar methodology—to have the lowest price/fair value ratio among firms with a sustainable competitive advantage. The $686 million fund aims to outperform the broad market by focusing on these high-quality firms, and year-to-date, that has been the case.
Charts courtesy of StockCharts.com
On the flip side, Microsoft shares were trading marginally lower following the announcement. The largest ETF in the global tech segment that SOCL navigates in, the iShares Global Tech ETF (IXN | A-91) with $760 million in assets, holds Microsoft as its second-largest holding—behind Apple—at an 8.7% weighting.
IXN was trading 0.7% lower Monday.
Contact Cinthia Murphy at [email protected].