FANG investing…it’s not just for vampires.

In 2015, FANG—Facebook, Amazon, Netflix and Google—took the market by storm. The returns were obnoxiously bloated. $100k split evenly between the four growth giants would have left an end-of-year balance of $182,717.50. An identical investment ($100k) into IVV (an S&P 500 tracking ETF) would have yielded an end-of-year balance of just $101,300.

But some of that $80k+ outperformance is sliding off the table in this rocky market. As of noon today (February 8, 2016) IVV is down 9.61% from its 2015 close. The same FANG portfolio described above is down more than 20%.

That’s not to say that this trend will continue. But it dovetails nicely with the “narrow market leadership” we discussed in our most recent quarterly newsletter (and on the blog). Stocks like Facebook, Amazon, Netflix and Google (now Alphabet) were decisive outliers in a 2015 market defined by volatility and consumer…shall we say…conflict. As this market (the 2016 edition) trends more and more towards fear and shakiness, it’s harder for those outliers to find standing room.

In fairness, Facebook reported strong earnings and outlook and has put-performed the market year-to-date. But FB was also the least far-gone of these runaway outperformers last year. Meanwhile Amazon and Netflix, two companies that more than doubled in 2015, have already given back more than a quarter of their value year-to-date.

Click to enlarge.

Click to enlarge.


Note: At the time of publication Narwhal Capital Management clients and/or employees owned shares of FB, AMZN, GOOG and IVV.


Andrew Hall is the Vice President of Narwhal Capital Management.

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