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Facebook is making headlines again with its latest move to capture the photo sharing service of Instagram. As the social media sub-sector of the technology market continually heats up, how can investors gain exposure to these hot spots with exchange traded funds?

A game plan is indeed necessary if an investor wants to gain exposure to the social media side of the technology sector. ETFs can be of service, but investors must be ready to do some research. Don Dion of The Street reports that the social media industry is still young, so finding the right tool is not easy.

For instance, the major social media ETF trading is the Global X Social Media ETF (SOCL) which represents a host of domestic unknowns as top holdings. The familiar holdings, such as Yelp (YELP) and LinkedIn (LNKD) are good lures, but this is where the U.S ends. About 40% of the portfolio is domestic and the rest is a global social media investment.

Japan, China and Germany are other top regions represented in the SOCL index. Besides the global reach of the fund, the liquidity can be questionable. The average daily trading volume is under 35,000 and the 0.65% expense ratio is on the high side.

Investors may also want to compare the First Trust Dow Jones Internet Index Fund (FDN) which is a 100% all-American fund. Technology companies rule the holdings and E-commerce web portals and service are the major industry represented. Furthermore, the liquidity and trading volume make this a safer bet than SCOL.

As the social media arena is beginning to take off, it is best for investors to watch for a while first, and not get carried away with the hype of it all.

Tisha Guerrero contributed to this article.

Source: Social Media ETF Back In The Spotlight