Top Tech News

BOSTON (Reuters) – Eager buyers bacilliform huge lines terminal week for a chance to acquire Apple's iPad 2 before it oversubscribed out.

Fund companies, agog to cash in on the "Post-PC" epoch of tablets and sharp phones are disagreeable to invoke the Next Big Thing into the Next Big Investment.

The stylish substance is an ETF that bundles together dozens of the sector's players into a Smart Phone index. In theory, it lets investors diversify in a sort of stocks rather than swing it every in one,

Instead, it has shown how diversity crapper backfire when finance in sectors.

Much of the modify in the sharp ring mart is generated by digit company, Apple (AAPL.O). It's not that others are imperfectness to sell products. Overall sharp sound sales soared 89 proportionality to 101 million in the stylish lodge from the preceding year, according to mart researcher Canalys. Much of that comes from Apple-chasers same Motorola Mobility (MMI.N) and Samsung Electronics (005930.KS).

With so whatever so whatever newborn players it's tempting to countenance for winners another than Apple, whose hit is not affordable after nearly quadrupling in digit years. It remains nearby its all-time broad of $364 and seems priced for continuing broad performance, if not perfection.

The newborn exchange-traded fund, the First Trust NASDAQ CEA Smartphone Index Fund (FONE.O), is fashioned to permit investors endeavor the ambulatory figure way more generally by swing bets on more than digit equid in the sector. In fact, it has most 73 assorted stocks.

The money has attracted a respectable $15 million in the period it has been offered. But so far its action has been disappointing. Since its debut, it has lost 11 percent.

Why has the money fallen so much? And is it today a bargain? As with every ETFs, it pays to countenance beneath the labels and review the fund's actual content.

Not every figure makers are prospering in the fiercely combative ambulatory mart of 2011. Gains for devices supercharged by code from Apple and Google (GOOG.O) in the United States hit become at the expense of Research In Motion's (RIM.TO) Blackberry, for example. And Nokia (NOK1V.HE) tossed discover its underway code papers to bond up with Microsoft's (MSFT.O) Windows Phone 7.

Too such change crapper clean discover whatever gains, as in the housing of the sharp sound ETF. It's hard to become discover ahead if you look on every equid in a race.

EQUAL WEIGHT FOR HEAVY WEIGHTS

RIMM and Apple hit most coequal coefficient in the ETF's index, followed closely by Nokia and Samsung. Since the money debuted, its double-digit loss compares with Apple's smaller 2-percent decline while it topped the another main competitor, Blackberry concern Research In Motion's (RIM.TO), which lost 13 percent.

Global sharp sound colossus Nokia Jerry Jordan, trainer of the highly-rated river Opportunity money (JORDX.O), recommends a more targeted approach to acquire from the stunning ontogeny of ambulatory figure usage.

Jordan's money has outperformed 97 proportionality of competitors over the time five years, thanks in conception to a well-timed look on Apple and another stocks benefiting from the popularity of ambulatory devices.

"Theoretically, you are always meliorate production digit stocks than 12, but you meliorate intend the digit right," he said. "The prizewinning intent is to acquire half of the basket, so you ease hit whatever diversification, but you are ease applying whatever skill."

Along with Apple and Google, Jordan's money owns a handful of attendant stocks same memory bourgeois SanDisk (SNDK.O), which is not owned by the ETF, and chip specializer Qualcomm (QCOM.O), which is.

WHEN IT PAYS TO BUY STOCKS, NOT ETFs

It's likely that whatever stocks included in the sharp sound ETF could be perceive by the iPad's popularity, analysts warned.

Some tech stocks are in a "tablet bubble" that is most to separate as it becomes country most consumers favour Apple's products, JP Morgan shrink Mark Moskowitz reiterated on Monday. That could perceive makers of competing tablets same Samsung and RIM.

Money managers ofttimes study the strategic benefits of ETFs versus individualist stocks in swing clients' money to work.

A few months ago, Roger Nusbaum, chief investment officer at Your Source Financial in Phoenix, Arizona, definite to alter whatever of his clients' forcefulness danger to coal-related stocks.

He intellection that combust companies globally should benefit from ascension forcefulness demand, and opted for the Market Vectors Coal ETF (KOL.P) which includes Chinese stocks same Yanzhou Coal Mining (600188.SS) along with U.S.-based producers same pedagogue Energy (BTU.N).

But in the housing of whatever fast-growing developing markets, Nusbaum skipped the ETFs entirely for more targeted exposure. The popular iShares MSCI Brazil Index Fund (EWZ.P), for example, had momentous danger to the country's banks. Nusbaum was wary of the overall financial facet and opted to acquire defence colossus Vale SA (VALE5.SA) instead as the meliorate endeavor on Brazilian growth.

For whatever themes or sectors, ETF "will be the prizewinning choice and for whatever others they module not," Nusbaum said. "It makes no sense that whatever azygos wrapper crapper be the prizewinning creation for every nowadays and every mart segments."

(Reporting by Aaron Pressman. Editing by Richard Satran)

Source