Motif Investing 'Shares' A Social Networking Portfolio To 'Like'
Motif Investing constantly hunts for “trends, ideas and world events that could create an investment opportunity,” and then selects 10 to 30 related stocks to build portfolios that weigh them based on their exposure to a this particular idea, event or trend.
Within the tech segment, a few motifs offer high returns and moderate volatility.
This is the case of the social networking motif, which offers moderate volatility and high returns (11 percent over the past month, 10.9 percent in the past year). However, it should be highlighted that the motif’s valuation is very high.
‘Like’ The Social Motif?
Motif Investing explains the rationale for the group of stocks:
“It is now estimated that 1 out of every 4 minutes on the web is on a social site. And usage figures continue to grow as social becomes more mobile, spreads internationally and gets deployed within the enterprise. Online advertising, the predominant business model of social, still accounts for only 22% of the total $503 billion advertising industry. So there is plenty of room to grow and that might leave many investors wanting to ‘like’ this Social motif.”
The motif allocates 81.1 percent of assets to social networking sites; 9.5 percent to companies that operate specialty networks across several verticals like social gaming and dating; and 9.4 percent to websites focused on community reviews.
Source: Motif Investing
The chart above illustrates the returns of this motif/portfolio over the past year and past month (in blue), compared to the S&P 500 (in green).
The top stocks by allocation are:
- Facebook Inc (NASDAQ: FB), 22.6 percent
- LinkedIn Corp (NYSE: LNKD), 16.1 percent
- Twitter Inc (NYSE: TWTR), 14.8 percent
- Yelp Inc (NYSE: YELP), 8.4 percent
- Momo Inc (ADR) (NASDAQ: MOMO), 8.3 percent
- Youku Tudou Inc (ADR) (NYSE: YOKU), 8.0 percent
- YY Inc (ADR) (NASDAQ: YY), 6.3 percent
- Zynga Inc (NASDAQ: ZNGA), 6.0 percent
- Weibo Corp (ADR) (NASDAQ: WB), 3.9 percent
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