You know you’re one of the largest, most successful companies in the world when you can change your name and still not miss a beat in terms of investor interest. But that’s exactly what the conglomerate Alphabet (GOOG) did in 2015 when it was created as part of Google’s corporate restructure. Today, Alphabet is the parent company of Google as well as a number of its subsidiaries. The idea was to create a structure with “greater autonomy” and allow Google to expand into other businesses beyond simply internet services.

In addition to Google, Alphabet’s subsidiaries include Calico, DeepMind, GV, CapitalG, X, Google Fiber, Jigsaw, Makani, Sidewalk Labs, Verily, Waymo, Wing and Loon. It also oversees former Google projects such as YouTube, the Android mobile operating system and more.

Alphabet reported more than $110 billion in total revenue in 2017, 86% of which comes from advertising via Adsense and Google’s AdWords products, 53% of which operates outside of the U.S. 

Rationale

The most direct way to gain exposure to Alphabet is to buy its listed shares. But investors have good reason to reconsider that approach given GOOG’s long-term growth prospects and its current price. What was once a high-growth internet startup is now a well-established digital enterprise, and the creation of Alphabet as the Google holding company only solidified that fact. GOOG itself is no longer a growth holding. 

However, for investors interested in gaining exposure to the internet sector, rather than buying GOOG shares themselves should consider buying funds that provide exposure to Alphabet and other and other similar firms. After all, the return drivers that will benefit GOOG might also benefit other similar firms in internet services. As investment management is gradually moving to the construction of portfolios using ETFs and mutual funds in addition to single stocks, investors would do well to consider gain exposure to firms like GOOG through these types of funds.

Investing in GOOG

A search on Magnifi suggests that investors can gain access to Alphabet via a number of different funds and ETFs, including those shown below. 

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