As a collective, the FAANG stocks – Facebook,
Amazon.com, Apple, Netflix and Google (Alphabet) – along with other tech heavy hitters Alibaba, Baidu, NVIDIA, Tesla and Twitter, finally followed the broad market index into negative territory. A $1,000 investment in the cohort of equities, as measured by the NYSE FANG+ index, on Dec. 31, 2017, would be worth $989 as of midday Thursday after peaking at $1,368 in June. The index’s second-quarter run gave it some breathing room in the event of declines, some of which was given up in the third quarter, even as the broad market index steadily rose. Fourth-quarter volatility took its toll on markets with the Russell 3000 index dipping into year-to-date declines, seemingly for good in the early days of December with the FAANGs following two weeks later.
Given its nature as a sector index, particularly one in a more volatile industry, returns will typically be in the same direction as the broad market, but more so. The average return of the NYSE FANG+ index was -1.23% on days the Russell 3000 index was down while the tech index gained an average 1.1% on days the markets were up.