Shipments of smartphones in 2010 were up 74% globally on 2009 to 302million handsets. Many people already recognise that smartphone adoption will become widespread, resulting in many companies involved posting record profits or sales or both!
A very enterprising company called First Trust Advisors have created a Smartphone ETF (exchange traded fund) to enable the retail investor access to all the main players in the smartphone market at once. It allows them to buy into businesses that are based in South Korea, Taiwan, etc. which is not easy for the average Joe.
The Smartphone ETF listed on Nasdaq today with the ticker FONE. It makes a lot of sense as it includes some booming businesses including HTC who have really benefited from Google’s Android OS. Risk is reduced over 74 different stock holdings inside the ETF and the smallest company has a market cap. of $300million. The expense ratio is also reasonable considering it is so niche, coming in at 0.7% per year.
Smartphones are now outselling PCs for the first time, so the timing of this new investor tool could not be better. I think it is a no-brainer investment for the next 2-3 years at least & will be buying some.