As FAANG stocks falter, fund managers make bets on survivors

NEW YORK (Reuters) – A bear market in the so-called FAANG stocks – Wall Street’s most popular trade going into the year – is pushing fund managers into searching for the next big growth companies that can lead the overall market higher.

FILE PHOTO: A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., December 4, 2018. REUTERS/Brendan McDermid/File Photo/File Photo

Shares of Facebook Inc (FB.O), Amazon.com Inc (AMZN.O), Apple Inc (AAPL.O), Netflix Inc (NFLX.O), and Google-parent Alphabet Inc (GOOGL.O) reached record highs in July.

Since then, problems ranging from Facebook’s data privacy scandals to Apple’s declining iPhone sales to Netflix’s rising cash burn rate have cratered the stocks, helping push the tech-heavy Nasdaq Composite index to the edge of a bear market. The Nasdaq lost another 1.7 percent in midday trading Friday.

With shares of the FAANGs down by an average of 25.6 percent since the start of the quarter, fund managers and analysts are starting to reconsider their approach to growth, treating the FAANG stocks less like a single bloc and more on their individual merits.

“This was a year when at the start of it you had to own the FAANG names and at the end of it you don’t want to own any of them,” said Kevin Landis, portfolio manager at the Firsthand Technology Opportunities fund.

Landis, who has been trimming his position in Apple yet still holds Amazon.com and Alphabet among his 10 largest positions, said that the FAANG group is breaking down as the companies

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