Look at how the Social Media ETF (SOCL) has done early in 2017 and you might think that optimism abounds. In a little over a month, the fund is up nearly 10%. Over the past year, it’s up more than 40%. But under the surface, there’s some reason for concern.If you look at the performance of the fund over the past 12 months, you’ll see that it hasn’t been the expected names that have been driving the gains. Facebook (FB), the fund’s largest holding, is up 26%. Alphabet (GOOG) is up 17% and Twitter (TWTR) is up 11%. Rather, it’s been Yandex (YNDX), the Russian internet provider, up 79%, Sina (SINA), the Chinese online media company, up 69% and Tencent Holdings (TCTZF), the Chinese internet giant, up 52%.With Twitter’s earnings report coming on Thursday, the focus will be back on this side of the pond. The company’s issues are already well documented and there doesn’t seem to be much to look forward except the possibility of renewed takeover rumors. I’d expect that the quarter will probably be fine but forward guidance will be weak and the company will continue to lose money. Twitter tends to move significantly on earnings and I think a 10% move to the downside is not out of the question. Twitter weakness, fortunately, doesn’t often spill over to the rest of the sector since it’s such a unique animal, but at more than 10% of the Social Media ETF’s total assets it could move the fund downward.My other short term concern is the upcoming Snap (SNAP) IPO. It’s inevitable that this stock will eventually make its way into this portfolio and with 158 million daily active users, according to the S-1 filing, it’s easy to make the comparison to Facebook. I think the more apt comparison would be some combination of Twitter and GoPro (GPRO).Why GoPro? In its prospectus filing, the description of the company says simply...“Snap Inc. is a camera company.”Most think of Snap as another social media platform (albeit a very niche one) and the company may look very different if its goal is to develop and evolve its core camera application instead of build an expanding social network based on advertising and other revenue generators.Looking for another curious statement to come out of the S-1? How about this one?“We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability.”How’s that for confidence inspiring? The prospectus is meant to illustrate both the potential and the risks of the company but there are some shreds of truth here. Snap generated about $400 million in revenue, a little more than Twitter when it went public, but lost more than $500 million in 2016. Most of that revenue comes from advertising which probably doesn’t have a lot of upside unless it can create new revenue streams. On top of all that, the shares that will be issued in the IPO carry ZERO voting rights. That means management and pre-IPO investors (along with a potential activist investor I’d imagine if one were to come on board) have the sole voice in the company’s decision making while the common shareholder is forced to sit on the sideline. Not a whole lot to look forward to here.In summary, I think in the short term, Twitter’s results will put pressure on the fund while, in the longer term, the assumed addition of Snap could be adding a dud to an already concentrated portfolio. I think the short term gains in this group are likely over for the time being as investors responded tepidly to reports from the likes of Facebook and Alphabet. Given some of the headwinds ahead, I’m avoiding this ETF for the time being.