Nokia (NOK), Celestica Inc. (CLS) Among Top 10 Holdings of New Smartphone ETF

A new smartphone ETF from First Trust Advisors of Wheaton, Ill. was launched Friday, which will trade under the symbol of "Fone."

Among the top ten holdings of the fund, which was based on a creation of Nasdaq and the Consumer Electronics Association in April of 2010, are Nokia (NYSE:NOK), Celestica Inc. (NYSE:CLS).

The fund was launched with 74 holdings overall.

Some questions as to why Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) weren't in the top ten of the holdings of the company have been raised, although they are in the overall holdings of the smartphone ETF.

Michael Johnston, senior analyst at ETF Database, said the introduction of an ETF based on the smartphone sector may appear "gimmicky," but said it will be an “interesting test” for how the ETF business is progressing; especially after some recent very targeted ETFs didn't draw much interest.

The concluded that the smartphone ETF is “constructed in a manner that offers balanced, efficient exposure to a compelling investment thesis: that smartphone adoption is on the rise — especially in emerging markets where penetration rates are a fraction of levels seen here in the U.S.”

As with any index or fund, the success will be determined by the health of the underlying sector. The smartphone sector seems poised for global growth in the years ahead, but there are a lot of potential pitfalls along the way, including sustainable global economic growth, specifically among growing middle classes in emerging markets which have more discretionary income.