The Exchange Traded Fund frenzy does not show any signs of cooling off even with equities at all-time highs and amid fears of an imminent correction. With social media emerging as a powerful tool capable of influencing actions in the equity markets, ETFs targeting the social media frenzy could be the way forward. Investment firm VanEck is the latest to affirm it is possible to discover investment opportunities by listening to social media chatter.
Social Media ETF
The firm has confirmed plans to launch a social sentiment exchange-traded fund. The fund will seek to provide investors with exposure to stocks experiencing the most chat on social media. VanEck Vectors Social Sentiments ETF is the new ETF that is simply an upgrade of a similar ETF that barely got off the ground.
The ETF is to track the Buzz NextGen AI US Sentiment Leaders Index’s performance, a benchmark that fueled the Sprott Buzz Social media Insights ETF that dropped off in 2019, having averaged close to $9 million in assets.
The Buzz index is best known for aggregating investment-related content from social media sites such as Twitter, blogs, and news articles. The fund managers deploy machine learning and artificial intelligence tools to identify pattern trends and changing sentiments that can affect market-based outcomes.
The index portfolio is balanced monthly, ensuring that only 75 large-cap stocks with the highest degree of positive investor sentiment are tracked. The index came into being to track what people are saying online about equities, thus creating a way of profiting from the same.
At its peak, the Sprott ETF outperformed the S&P 500 by about 10%. It has taken off rallying by more than 130% in the recent past, well ahead of the 55% gain registered by the broader index. The outperformance stems from broadening online conversations that are fuelling investing activities largely.
ETFs Capital Acquisition
Separately, ETFS Capital has completed the acquisition of ETF.com, the world’s largest authority on ETF news analysis and education. Founded in 2001, the outlet was part of Cboe Global Markets, a global trading solutions provider.
Cboe acquired ETF.com in 2016 as part of an effort of helping retail investors and advisors have a better understanding of ETFs benefits through best in class educational material. In recent years, the ETFs publications have expanded its multimedia business with webinars, events videos, as well as podcasts.
Cboe has already confirmed it will continue furnishing ETF.com with excellent resources and marketing services to listings and trading clients as its global footprint broadens. The acquisition also presents a unique opportunity for collaboration between Cboe and ETFs Capital going forward.
With the ETFs Capital, ETF.com remains well-positioned to benefit from related businesses and expertise across a vast portfolio covering data analytics index services and front office technology. it also joins a vast portfolio made up of the likes of ETF stream, one of the world’s leading European ETF website, and AltFi, a market-leading website for the global fintech community.