So You Wan’t To Invest In HTC?

First Trust is not the most popular ETF provider on the planet but I thinks that’s about to change.  Last week, First Trust introduced the First Trust CEA Smartphone Index Fund (FONE). Below are the funds top 10 holdings: 

Compal Communications Inc:  3.50%
Motorola Inc:  2.84%
Samsung Electronics Co:  2.78%
LG Electronics Inc:  2.74%
HTC Corporation:  2.74%
Celestica Inc:  2.73%
Benchmark Electronics Inc:  2.73%
Wistron Corp:  2.64%
Nokia:  2.64%
Inventec Corp:  2.62%

FONE started trading last Friday, 2-18-11, and so far hasn’t received much attention with an average daily volume of 125,000 shares over the first two days.  I think everyone is nervous of the market and is hesitant to put money into new ideas, especially in Tech which has led the rally, but when the dust settle’s I see FONE as a great place to put money.

My rational is very simplistic but that’s what’s great about it.  FONE is the first ETF that specialises in smartphone’s and the smartphone industry.  At first I didn’t think much of FONE but when I took a closer look at the holdings I noticed the fund gives you a lot of exposure to Asian Companies that the regular Joe would not necessarily have exposure to.  Some of FONE’s largest holdings are HTC, Samsung, and LG which have been rock solid when it come to consumer electronics.  If I’m a retail investor and especially a broker I’m putting some of by clients money into this ETF as it is a new opportunity and a great way to diversify.

FONE has lacked any decent price action but once I see an increase in the average daily volume and uptick in price I will be buying.

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