Bedazzled By Market Trends? 2 ETFs That Trade On Wall Street Buzz
Investing.com | Jul 08, 2021 04:44AM ET
Regular readers of this column will note that we emphasize long-term investing in solid companies or exchange-traded funds (ETFs) that provide access to robust shares. For most retail investors, the daily noise in the market should be irrelevant as they patiently save and invest to build their nest eggs. Therefore, most of the ETFs we write about are large established funds with long trading histories.
However, we also occasionally discuss various investment themes that are in the limelight, like meme stocks or funds with niche focuses that could be of interest to a range of investors, like SPACs. The two ETFs we introduce today are among such funds.
h2 FOMO ETF/h2Current Price: $25.60
52-Week Range: $25.02 - $26.59
Expense Ratio: 0.90% per year
The FOMO ETF (NYSE:FOMO) gets its name from the acronym for Fear Of Missing Out. FOMO gives access to current or emerging trends on Wall Street. It invests in equities, other ETFs and a range of additional asset classes. This actively managed fund, sponsored by Tuttle Capital Management , started trading in late May.
Matthew Tuttle, CEO of the firm, suggets :
"As technology evolves, investors will continue to look for exposure to new areas of the market. FOMO is positioned to dynamically shift exposure to current market trends."
The fund currently holds 128 stocks. The leading 10 holdings comprise 13% of net assets or almost $6 million in total. In other words, this is a small, new fund.
Social media analytics platform Sprout Social (NASDAQ:SPT); cybersecurity groups CrowdStrike (NASDAQ:CRWD); Zscaler (NASDAQ:ZS) and Tenable (NASDAQ:TENB); pet products e-commerce retailer Chewy (NYSE:CHWY); and DocuSign (NASDAQ:DOCU), which offers electronic signature solutions, lead the names in the roster.
Since inception, FOMO is up about 3%. It could be a fund worth keeping an eye on.
h2 2. VanEck Vectors Social Sentiment ETF/h2Current Price: $26.01
52-Week Range: $21.93 - $26.61
Dividend Yield: N/A
Expense Ratio: 0.75% per year
The VanEck Vectors Social Sentiment ETF (NYSE:BUZZ) tracks retail sentiments online to invest in US-based stocks. Many of our readers are likely to follow how traders and retail investors on social media sites like Reddit or Twitter (NYSE:TWTR) have acted collectively to short-squeeze stocks that are heavily shorted, especially by hedge funds.
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As institutional investors were forced to liquidate their massive short positions because of the 'retail rebels,' a number of companies rose to fame in 2021 and their stocks saw eye-popping returns. Several of these widely-followed and traded names include:
AMC Entertainment (NYSE:AMC) – up 1,940% year-to-date (YTD);
BlackBerry (NYSE:BB) – up 74% YTD;
GameStop (NYSE:GME) – up 862% YTD.
BUZZ, which started trading in early March, has 75 stocks. The leading 10 names comprise around 32% of net assets of almost $249 million.
Omnichannel video game retailer GameStop (NYSE:GME), institutional software platforms provider Palantir Technologies (NYSE:PLTR), digital sports entertainment and gaming company DraftKings (NASDAQ:DKNG), clinical-stage vaccine developer Novavax (NASDAQ:NVAX) and interactive fitness platform Peloton Interactive (NASDAQ:PTON) are among the leading stocks in the roster. Many of these names have been in the headlines due to collective actions by retail traders.
As far as sector allocations are concerned, information technology leads with 24.7%, followed by consumer discretionaries (23.3%), communication services (20.5%) and health care (9.3%).
Sine inception, BUZZ returned about 11%. The ETF might appeal to readers who want to invest in meme stocks as well as other businesses that are getting increased attention from retail traders. However, those potential investors should also remember that the fund’s returns are likely to be volatile.
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