There's a new investing vehicle for fence-straddling fans of the smartphone industry. Friday was the launch of the First Trust NASDAQ CEA Smartphone Index Fund (Nasdaq: FONE), an ETF snapping up handset makers, mobile operating system providers, chip makers, software developers, and wireless carriers.

The rub here is that investors will be gaining exposure to all of the major players.

The largest holding isn't Research In Motion (Nasdaq: RIMM) or Apple (Nasdaq: AAPL). In fact, neither of those companies cracks the list of the fund's five largest investments. Printed circuit boards maker Sanmina-SCI (Nasdaq: SANM) is the ETF's largest holding at launch, followed by Taiwanese notebook maker Compal and Canadian printed circuit board maker Celestica (NYSE: CLS).

In other words, it's not weighted toward the names that one would expect to find here. There isn't a single wireless carrier among the ten largest holdings. Google (Nasdaq: GOOG) may be the operating system darling behind the fast-growing Android platform, but Big G isn't anywhere to be found among the fund's largest holdings.

The fund will be rebalanced quarterly. It also carries a 0.7% expense ratio. That may seem low for a sector-based mutual, but it's rather high for an index-based ETF.

For investors sold on the potential of the smartphone market but lacking the due diligence to vet the winners from the losers, picking up a basket of 73 global stocks may seem like a reasonable strategy. The problem is that there will be plenty of losers here sandbagging results. There are too many operating systems out there trying to elbow their way in. The spike in global demand may not be enough to offset the inevitable cutthroat pricing that will squeeze margins.

This doesn't mean that First Trust is wrong to launch the fund. It's a seasoned vet in this space, watching over 44 ETFs with more than $6 billion in assets. It's just not for me. This isn't a race where investors will want to wager on every single horse running. I may lean on it from time to time as a tracking stock, seeing how my favorite smartphone players are performing against the pack. I'll probably add it to My Watchlist when it's available in a few days.

However, I can't recommend a passive investment in an active industry. The pool of winners and losers is changing too quickly to be bogged down to a basket.

What are your favorite smartphone plays? Share your thoughts in the comment box below.

Google is a Motley Fool Inside Value selection. Google is a Motley Fool Rule Breakers recommendation. Apple is a Motley Fool Stock Advisor selection. The Fool has written puts on Apple. The Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz owns a smartphone but none of the smartphone stocks mentioned in this article. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.