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 fixed3.69%3.76%
15 yr fixed2.80%2.82%
5/1 ARM3.07%3.10%
30 yr refi3.69%3.76%
15 yr refi2.83%2.83%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,204.97 -211.61 -1.29%
Nasdaq 4,363.14 -146.41 -3.25%
S&P 500 1,880.05 -35.40 -1.85%
Treasuries 1.85 -0.02 -0.86%
Data as of 11:07am ET
Company Price Change % Change
Bank of America Corp... 12.95 -0.30 -2.26%
Facebook Inc 104.07 -6.42 -5.81%
Freeport-McMoRan Inc... 5.68 -0.04 -0.70%
Microsoft Corp 50.16 -1.84 -3.54%
General Electric Co 28.54 -0.64 -2.19%
Data as of Feb 5

Sections

Anheuser-Busch has been the exclusive beer advertiser featured during the Super Bowl since 1975, and it's spent more on Super Bowl advertising than any other company for the last five years in a row. More

The economy is better than it was, but not even President Obama is ready to declare it's booming. More

Laurie Segall sits down with Foursquare's new CEO Jeff Glueck to discuss the company's latest round of funding at a lower valuation, and their hybrid consumer/enterprise business model. More

Nonprofit JumpStart has launched a new $10M fund that will only invest in women and minority-led startups. The catch: You have to move to Ohio. More

Portland, Oregon, is often described as the last affordable cool city on the West Coast. But as more people move to the city, it's becoming increasingly unaffordable. More