- There’s a growing number of exchange-traded funds designed to capture the market zeitgeist and invest in popular themes.
- “The rise of the so-called sentiment ETFs … makes a lot of sense in a socially distanced world,” Antoni Trenchev, co-founder and managing partner of Nexo, told Insider.
- Insider provides a list of six sentiment- and specialty interest-driven ETFs available to investors right now.
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In an attempt to capture the stock market zeitgeist, investors have launched various investment vehicles to profit from the current buyers market.
Exchange-traded funds are designed to track an index, sector, commodity, or currency – and they’ve most recently turned their sights on investor sentiment. It’s an emerging trend that’s been driven in recent weeks by the GameStop stock mania that transpired on Reddit and upended Wall Street.
“Paradoxically, the pandemic actually led to an influx of new investors, many of whom are likely partaking in the ongoing ETF push,” Antoni Trenchev, co-founder and managing partner of Nexo, told Insider. “The rise of the so-called sentiment ETFs, for example, makes a lot of sense in a socially distanced world.”
He continued: “Instead of talking over beer in the pub, people are taking to Twitter and Reddit to share their attitudes towards stocks.”
Insider has compiled a list of six sentiment- and specialty interest-driven ETFs available to investors right now:
Who’s it for? Those who love social media
The VanEck Vectors Social Sentiment ETF aims to scrape websites like Reddit, StockTwits, and Twitter to determine which stocks are garnering the most positive attention online. It started trading on March 4 and quickly saw $280 million in fund inflows. BUZZ, backed by Barstool Sports founder David Portnoy, passed $500 million in total net assets just two weeks after.
The portfolio is rebalanced monthly and composes of 75 US large-cap stocks that have the highest degree of positive investor sentiment and bullish perception. Virgin Galactic, the commercial spaceflight developer overseen by billionaire Richard Branson, is its largest constituent.
Who’s it for? Those who fear missing out
This ETF from the Collaborative Investment Series Trust aims to invest in current or emerging trends as a way to alleviate investors’ fears of missing the next big thing. It was filed with the US Securities and Exchange Commission on March 10.
FOMO will primarily invest in everything from emerging companies of any market capitalization to SPACs, to equity ETFs, fixed-income ETFs, volatility and inverse volatility ETFs, among others. The fund, advised by Connecticut-based Tuttle Tactical Management LLC, will follow “a proprietary tactical model” in managing assets.
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Who’s it for? Those obsessed with sports
This ETF consists of 36 sports-related holdings including sports teams, leagues, media companies, and even sports-related SPACs. It was launched on March 17 by Roundhill Investments and Huddle Up newsletter founder Joe Pompliano as the first ETF dedicated to professional sports teams and leagues.
MVP’s largest holding is Madison Square Garden Sports at 9.39% of the total ETF value. It also includes Formula One and WWE as well as Nike, Puma, Adidas, and MSG Networks.
Who’s it for? Those willing to face inflation
This Horizon Kinetics Inflation Beneficiaries ETF aims to identify companies that would thrive in an inflationary environment. Considering inflation is the foremost fear for equity investors right now, this fund rests firmly in the market zeitgeist.
It launched in January 2021 and will consist generally of common stock, ownership units of publicly traded master limited partnerships, and units of royalty trusts.
Who’s it for? Those invested in the space race
The Procure Space ETF – which says it’s the world’s first pure-play space ETF – aims to invest in companies engaged in space-related industries. ProcureAM CEO and co-founder Andrew Chanin told Insider said he wants the public to realize the importance of space discovery not only in daily things such as communicating, but also in more far-looking reasons such as military and economic advancements.
UFO, launched in 2019, holds Loral Space, Viasat, and Gilat, among others. It may have a competitor in the field soon via star stock picker Cathie Wood’s Ark Space Exploration ETF under the symbol ARKX. But Chanin is unperturbed.
“We see that as validation that we were first pure-play space industry and provided investors with this global exposure,” he said.
Who’s it for? Those interested in clean energy
The Defiance Next Gen H2 ETF, a hydrogen and fuel cell-based ETF, aims to track the most liquid, innovative hydrogen stocks in the marketplace. The ETF is focused on companies that put importance on clean energy and next-gen tech innovation.
Thus far, it has already accrued $2.85 million in net assets since its launch last week in March. HDRO composes of Plug Power, Ceres Power, and Ballad Power.
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