How To Invest In Twitter For Less Than $20

Young and profit-less Twitter is a risky investment. At $42.90 a share it's not a particularly cheap investment either. ETF issuer Global X is betting it can mitigate this risk by selling you not only Twitter, but a whole bundle of tech stocks.

Global X started its Social Media Index ETF in November 2011. In two years the fund has grown from $1.5 million in assets to $106 million. It now trades for around $18.50 a share. That is up 26% from its original price — and 55% year-over-year.

Although Twitter will not be added until later this week, the 27 stock fund has benefited from the excitement surrounding the micro-blog's initial public offering, as well as from improving industry performance. Jay Jacobs, Global X fund research analyst, believes "the social media industry is coming into a new level of maturity."

The fund grew some when Facebook Facebook went public in May 2012 but failed to catch on. This time last year the fund had just $12.6 million in assets under management. Jacobs posits, "a lot of people were really waiting for the full offerings of the social media industry." Now that Twitter is public and Facebook's share price is up, investors are flocking to the ETF. Assets have grown 430% from $20 million in August and the Twitter IPO brought the fund's highest volume day yet with 600,000 shares traded.

Twitter will likely be added after trading Wednesday, at the close of a five day waiting period Global X uses to let IPO volatility cool down. Once added Jacobs expects Twitter to make up around 5% of the fund's holdings.

Stocks' weight in the fund is determined using free-float market cap. Only 12% of Twitter's shares are available for trade, so its $16.8 billion free-float market cap won't lead to a huge position for the fund (compared with Facebook's $69.7 billion). But this low float model has been typical for social media companies. Facebook floated about 10% in its IPO (currently 61% of shares are available to trade.)

Tencent Holdings Tencent Holdings is currently the largest position in the fund, making up 10% of net assets. The Chinese internet giant is followed by Facebook at 9.6%, LinkedIn LinkedIn at 9.5% and China's Sina Corp at 9.2%.