Stocks are great to invest in but sometimes we want a lot more diversification and we want it in a quick and easy manner. To get this, investors often flock to what is known as an “ETF” or exchange-traded fund. An ETF is simply a basket of assets an investor can invest in without having to buy all the components individually. For example, Cathie Wood’s ARKG ETF focuses on companies that develop, produce, or enable cutting-edge biological innovations such as CRISPR, and Stem Cells. Most recently the famous David Portnoy, self-proclaimed king of retail investors and Barstool Sports founder has endorsed a new ETF called Buzz.
The ETF was announced just this week on David’s Twitter. Portnoy is a shareholder in VanEck, the company that is creating the ETF. BUZZ will focus on the most popular stocks based on market sentiment and filter stocks based on an algorithm designed to scrape the internet and find positive sentiment on stocks. In tandem with the increase in internet stock chatter and the power of retail investors on forums like r/WallStreetBets, the ETF is aiming to capitalize on the way the internet is influencing the stock market. Last year the BUZZ ETF beat the S&P 500 in performance.
Despite these strong results, however, many are still suspicious of the ETF and even lack confidence in its legality. For example, Tyler Gellasch, the executive director of Healthy Markets thinks that the ETF “appears to be capitalizing on what could very well be determined by SEC and FINRA to be market manipulation”.
Do you think the BUZZ ETF will be allowed on the market? Or will it face too many hurdles to work?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.