#ETF: A Social Media ETF May Make Its Debut

by Todd Shriber

With all the fervor surrounding recent initial public offerings (IPOs) from the likes of LinkedIn and Yandex, and the breathless anticipation with which investment banks and traders alike are waiting for IPOs from Facebook, Groupon, Twitter and Zynga, it was only a matter of time before an ETF issuer jumped on the proverbial bandwagon.

That issuer is Global X. In a filing with the Securities and Exchange Commission last week, Global X announced plans for the Global X Social Media ETF, which will track the Solactive Social Media Index and will invest in companies involved in the social media industry, including those that provide social networking, file sharing and other web-based media applications.

Before getting too excited, it pays to remember a few things about new ETFs. First, a filing for plans for a new fund doesn’t mean that the fund in question will ever come to market. Second, even when a new ETF does debut, it is rarely to the same degree of hype reserved for hot IPOs. And as it pertains to the Global X Social Media ETF, if the ETF were to come to market before the IPOs for the aforementioned (and still private) companies, pickings for constituents could be somewhat slim.

Given the lofty heights of the social media craze, it seems reasonable to expect the Global X Social Media ETF will see the light of day at some point. Moreover, as noted by IndexUniverse.com, similar niche tech fare has done well in terms of attracting assets in the ETF universe. Either way, it might be a relief to some to know that Facebook, Groupon and the like could have at least one ETF to call home someday.

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