{"id":1206,"date":"2017-05-11T12:05:28","date_gmt":"2017-05-11T18:05:28","guid":{"rendered":"http:\/\/gpswp.com\/apwealthmanagement\/?p=1206"},"modified":"2017-05-11T12:05:28","modified_gmt":"2017-05-11T18:05:28","slug":"re-emergence-fang-stocks","status":"publish","type":"post","link":"https:\/\/gpswp.com\/apwealthmanagement\/re-emergence-fang-stocks\/","title":{"rendered":"The Re-emergence of \u201cFANG\u201d stocks"},"content":{"rendered":"<div id=\"body-content\">\n<h3>The Re-emergence of \u201cFANG\u201d stocks<\/h3>\n<p style=\"font-size:12px;color:#999;font-weight:normal\">May 11, 2017 | <a href=\"http:\/\/gdrive.gradientfinancialgroup.com\/includes\/gdrive\/gi-blog-print.php?id=1831\" target=\"_blank\">Print View<\/a><\/p>\n<p style=\"text-align:justify;margin:10px 10px 10px 5px\">So far, 2017 S&amp;P 500 performance has been relatively strong.  Through April, the S&amp;P 500 returned 7.16%.  An interesting dynamic of this performance has been the re-emergence of Facebook (FB), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOGL), or taken as an acronym, the \u201cFANG\u201d stocks.  This market reflection will concentrate on the performance of the \u201cFANGs\u201d and other stocks that have driven market performance this year, and what that means for GI portfolios.<\/p>\n<p>For a bit of history, the \u201cFANG\u201d acronym began to catch on in 2015.  The FANGs were singled out as a result of:\n<\/p>\n<ul>\n<li>the growth-oriented nature of these companies<\/li>\n<li>their significant outperformance compared to the market<\/li>\n<\/ul>\n<p>The chart below illustrates the \u201cFANG\u201d stocks significant outperformance versus the S&amp;P 500 during 2015 (green), their underperformance in 2016 (blue) and their re-emergence in 2017 (yellow):<\/p>\n<p><img decoding=\"async\" style=\"max-width:600px\" src=\"http:\/\/community.gradientfinancialgroup.com\/index.php?attachments\/2006&amp;fs=1\"> <\/p>\n<p>As a result of their size, the \u201cFANG\u201d stocks can have a large effect on the performance of the S&amp;P 500.  This is because the S&amp;P 500 is a market-capitalization weighted index, which simply means that larger companies carry more weight and have a more significant effect on the performance of that index.  In aggregate, the \u201cFANG\u201d stocks represent over $1.6 trillion in total market-capitalization.  As an example, if the S&amp;P 500 were an equally weighted index, the \u201cFANG\u201d stocks would be 0.8% of the total weight of the index (4\/500 = 0.8%).  However, because the S&amp;P 500 is a market-capitalization weighted index, the \u201cFANG\u201d stocks represent a combined 6.5% of the total weight of the S&amp;P 500.<\/p>\n<p>In addition to the \u201cFANG\u201d stocks, there are other large cap stocks that have had a significant effect on year to date market performance.  The data below shows the top 15 contributors to the S&amp;P 500 performance year to date.  The performance contribution from the top 15 stocks has been 3.36% in total, which represents 47% of the 7.16% year to date performance of the S&amp;P 500.<\/p>\n<p><img decoding=\"async\" style=\"max-width:600px\" src=\"http:\/\/community.gradientfinancialgroup.com\/index.php?attachments\/2007&amp;fs=1\"> <\/p>\n<p>How do the FANG stocks differ from Gradient 50 (G50) positions?  The answer is <b><i><span style=\"text-decoration: underline\">DIVIDENDS<\/span><\/i><\/b>.  The G50 would not be invested in \u201cFANG\u201d stocks, as none of those companies pay dividends.  As a reminder, the G50 portfolio invests in high-quality, blue chip companies that pay attractive dividends.<\/p>\n<p>From the list above, only 5 stocks meet the G50 investment criteria of a high quality company with a superior dividend yield (highlighted in green).  The G50 currently owns 3 of those 5 (in bold). Apple (AAPL) was also owned in the G50, but was sold in late January as the stock\u2019s dividend yield fell below our hurdles.  Therefore, in times when non-dividend paying stocks are driving the performance of the S&amp;P 500, we understand that G50 performance may differ from the overall market.<\/p>\n<p>The GI investment team believes in the long term value that the G50 and high-quality, dividend paying stocks provide for growth and income investors.  We have a strict investment process when selecting investments in the G50.  While we certainly don\u2019t discount the merit of owning growth companies like the \u201cFANG\u201d stocks for certain investors, we believe that these investments are suitable for a different type of portfolio, such as our growth oriented Gradient 33 (G33).<\/p>\n<p>For the G50, as with all GI portfolios, we believe that adhering to our specified investment process is the best way to create a portfolio strategy that balances individual investor risk and return objectives.  If you would like to learn more, please contact your advisor or Gradient Investments.<\/p>\n<div style=\"text-align:right\"><img decoding=\"async\" src=\"http:\/\/gdrive.gradientfinancialgroup.com\/images\/sig_Bryan.png\"><\/div>\n<h3>Past Market Commentary<\/h3>\n<div class=\"previousUpdate\">\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1795\">How Alarming is the U.S. Federal Debt?<\/a> April 13, 2017<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1763\">Post-Election Stock Market Update<\/a> March 20, 2017<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1754\">Exchange Traded Funds (ETFs) Explained<\/a> March 13, 2017<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1727\">The Case for Dividend Stock Investing<\/a> February 10, 2017<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1716\">Precious Metals &#8211; For Your Consideration<\/a> January 23, 2017<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1704\">Is It Finally Time For International Markets?<\/a> January 11, 2017<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1669\">Investors Finally Rotating Out Of Bonds<\/a> December 20, 2016<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1628\">Rising Interest Rates \u2013 What Do We Do?<\/a> November 17, 2016<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1614\">Election Jitters<\/a> November 3, 2016<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/gdrive.gradientfinancialgroup.com\/images\/icons\/filetype-article.png\"> <a href=\"http:\/\/www.gradientfinancialgroup.com\/gradient-investments\/market-reflections?id=1596\">2016 Gradient Elite Advisor Forum Wrap-Up<\/a> October 14, 2016<\/p>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Re-emergence of \u201cFANG\u201d stocks May 11, 2017 | Print View So far, 2017 S&amp;P 500 performance has been relatively strong. Through April, the S&amp;P 500 returned 7.16%. An interesting dynamic of this performance has been the re-emergence of Facebook (FB), Amazon (AMZN), Netflix (NFLX), and Alphabet (GOOGL), or taken [&#8230;]<br \/><a class=\"read-more small\" href=\"https:\/\/gpswp.com\/apwealthmanagement\/re-emergence-fang-stocks\/\">Continue Reading <i class=\"fa fa-long-arrow-right\"><\/i><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1206","post","type-post","status-publish","format-standard","hentry","category-market-reflection"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Re-emergence of \u201cFANG\u201d stocks - Asset Protection Wealth Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/gpswp.com\/apwealthmanagement\/re-emergence-fang-stocks\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Re-emergence of \u201cFANG\u201d stocks - Asset Protection Wealth Management\" \/>\n<meta property=\"og:description\" content=\"The Re-emergence of \u201cFANG\u201d stocks May 11, 2017 | Print View So far, 2017 S&amp;P 500 performance has been relatively strong. 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