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- The VanEck Vectors Social Sentiment ETF, which is traded as BUZZ, fell 3.4% in its debut.
- The ETF follows an index that cleans Internet platforms in search of stocks with a strong positive feeling.
- Barstool Sports founder Dave Portnoy endorsed the fund on Tuesday, praising it as an effective tool for tracking online traders’ favorite choices.
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The ETF VanEck Vectors Social Sentiment, a publicly traded fund that tracks online stock trends, fell by 3.4% on its first day of public trading.
The ETF, which is traded under the BUZZ ticker, aims to capitalize on the growing use of online platforms as a sounding board for business ideas. The fund tracks an index that clears sites like Reddit, StockTwits and Twitter to determine which stocks are accumulating the most positive sentiment online. Participations are then weighted accordingly.
Twitter, DraftKings and Ford are the fund’s biggest holdings on Thursday. This line will be rebalanced every month to better adhere to online stock research trends.
BUZZ was trading at $ 23.61 per share as of 11:05 am Eastern Time.
The ETF’s debut comes about a month after the daily traders gathered on r / WallStreetBets took GameStop shares to dizzying heights. Other stocks called memes, including AMC, Express and Koss, also rose as the trend fueled unexpected volatility. The bullish stock reversed shortly thereafter, but the price action left a lasting impact.
The phenomenon of the Reddit trader has prompted Wall Street to pay more attention to online conversations. Hedge funds have created tools to monitor posts on Wall Street Bets and other forums, both to protect their own short bets and to see where day traders might attack next.
Investors looking to use BUZZ to profit from the fast movements of online traders are probably out of luck. The ETF’s underlying online chat index measures the conversation about stocks over a 12-month period, thus leaving out whatever the next GameStop or AMC is. Companies must also have a market capitalization of at least $ 5 billion to be included in the 75-share ETF.
The ETF is still supported by one of the most experienced day traders on the Internet. Barstool Sports founder Dave Portnoy endorsed the fund on a Tuesday video, praising the instrument as an effective way to bet on the internet’s favorite stocks.
“There is a new ETF release that I am a part of, which I am putting my face back on, my reputation back on,” said Portnoy.
Portnoy’s popularity increased due to the pandemic after starting the Davey Day Trader Global, a live broadcast hosted by the founder of Barstool who featured him making quick bets on the stock market. The show preceded the January GameStop phenomenon and has since been seen as a sign of the new prominence of retail investors in the market.
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