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February 12, 2021

12.02.2021 - " The ETF for popular stocks on social networks is launched"

12.02.2021 -
Recently, the WallStreetBets community has become more famous, with millions of participants who, through their coordinated actions, dispersed the quotes of a number of small companies by hundreds or even thousands of percent, which eventually led to significant losses for hedge funds that held short positions in these securities. Against this background, the New York-based management company VanEck has decided to launch an ETF that will invest in the most discussed stocks on social networks.

The VanEck Vectors Social Sentiment ETF (as this fund is called) will follow The Buzz NextGen AI US Sentiment Leaders Index (www.buzzindexes.com), created by the Canadian hedge fund Periscope Capital a few years ago.

As the Financial Times writes (read more - https://www.ft.com/content/5655b6ae-89e6-4a03-9b4c-faa73d87e66f) this index will aggregate investment-related information from social networks such as Twitter and StockTwits, as well as blogs and news items. Then machine learning and artificial intelligence will try to identify patterns, trends, and changes in sentiment that can affect the market dynamics of companies. As a result, the 75 stocks that received the highest rating of positive investor attitude will make up a portfolio that is rebalanced on a monthly basis.

Here's what the top 10 index attachments look like right now:


The Financial Times points out that this is not the first attempt to create such a product – the Sprott Buzz Social Media Insights ETF, launched in April 2016, was closed in March 2019. At the same time, this ETF was not very popular – its assets averaged only about $9 million.< / br>
Perhaps this time the fund with shares from social networks has a bigger future. As we have already written (https://t.me/atranicapital/60) about the emergence of a large army of retail investors who began to actively trade in the pandemic and discussed the investment prospects of various companies in social networks. Indeed, it was during the pandemic that the stocks included in this index showed exceptional dynamics – since April 2020, The Buzz index has jumped by 130%, while the broad market has grown by only 55%.< / br>


Author: Atrani Capital Investment Director Igor Rotor.

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