Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Cashing in on the smartphone craze

chart_ws_stock_nasomxceasmtph.top.png By Catherine Tymkiw, markets editor

NEW YORK (CNNMoney) -- Love ETFs? Love your smartphone? Well break out your iPhone, Droid or BlackBerry. Starting today, you can buy a smartphone ETF.

First Trust Portfolio launched the new ETF on Friday under the ticker FONE (FONE). It lists Samsung, Motorola Mobility (MMI) and Nokia among its major holdings. And experts are giving it a thumbs up.

"It's not heavily invested in just a few stocks," said Tom Lydon, president of Global Trends Investments and editor of ETFTrends.com. "It's pretty broadly diversified."

About a quarter of the ETF includes semiconductors, with another 23% dominated by communications equipment.

But the rest is spread out pretty well among electronic equipment, wireless services and others. And some of the bigger names aren't included among the top 10.

There's no Apple (AAPL, Fortune 500), AT&T (T, Fortune 500), Verizon (VZ, Fortune 500) or Google (GOOG, Fortune 500) among the ETF's top 10 holdings, which Lydon says "bodes well for how this index was constructed." But those names are part of both the index and the ETF, which have a total of 72 components.

The smartphone ETF is clearly a niche-y product. It's unlikely that big institutional investors will snap it up. But that might be exactly what retail investors are hungering for.

"Some of these companies are huge," said Rick Ferri, investment adviser at Portfolio Solutions. "You're not getting a really pure play on smartphones."

The ETF comes less than a year after Nasdaq launched the NasdaqOMX CEA Smartphone Index (QFON). Since its debut in April 2010, the index has gained more than 19%.

Still, it's worth noting that this is roughly in line with how the PowerShares QQQ (QQQQ) ETF, which tracks the Nasdaq-100 and holds many of the same stocks, has done.

So investors don't necessarily need to buy the FONE ETF to cash in on the mobile craze. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.84%3.87%
15 yr fixed2.87%2.95%
5/1 ARM3.02%3.02%
30 yr refi3.89%3.97%
15 yr refi2.97%3.04%
Rate data provided
by Bankrate.com
View rates in your area
Find personalized rates:
Index Last Change % Change
Dow 16,776.43 304.06 1.85%
Nasdaq 4,781.26 73.48 1.56%
S&P 500 1,987.05 35.69 1.83%
Treasuries 2.06 0.07 3.37%
Data as of 7:49pm ET
Company Price Change % Change
General Electric Co 26.82 1.35 5.30%
Dow Chemical Co 46.31 1.86 4.18%
Bank of America Corp... 15.69 0.31 2.02%
Micron Technology In... 17.57 1.66 10.43%
Apple Inc 110.78 0.40 0.36%
Data as of 4:00pm ET


Critics says it'll ship more jobs overseas, advocates say it will increase U.S. exports and good paying jobs that go with them. Here's a look at the Trans-Pacific Partnership, or TPP. More

The social network and Eutelsat are teaming up to launch a satellite that will bring Internet to sub-Saharan Africa in 2016. More

Smarties, a Halloween candy staple, have been around for 66 years. Three Millennial women are revolutionizing it. More