BUZZ ETF is tracking the price and yield performance of the BUZZ NextGen AI US Sentiment Leaders Index. It includes 75 US stocks with the largest market cap and the highest degree of positive investor sentiment.
On Thursday, March 4, the VanEck Vectors Social Sentiment ETF (or BUZZ ETF) started trading on the New York Stock Exchange (NYSE). In its trading debut, BUZZ ETF dropped by 3.4%. As of 11:05 a.m. ET, BUZZ traded at $23.61. Currently, its price totals $23.52 per share.
What Is BUZZ ETF?
VanEck Vectors Social Sentiment ETF (BUZZ ETF) is tracking the price and yield performance of the BUZZ NextGen AI US Sentiment Leaders Index (BUZZTR). It includes 75 US stocks with the largest market cap which exhibit the highest degree of positive investor sentiment and bullish perception. The selection of stocks was based on content aggregated from online sources including social media, news articles, blog posts, as well as other alternative datasets. Specifically, the ETF’s algorithm monitors 15 million posts a month to gauge stocks with the most positive investor sentiment.
Ed Lopez, head of ETF product at asset manager Van Eck Securities Corp., manager of the BUZZ ETF, said:
“This represented to us a new era of investing. People are sourcing information online and, more broadly, with the sharing of ideas.”
Wall Street Buzz
Back in January, the Reddit community determined stocks that Wall Street was overwhelmingly betting against. These stocks were perfect targets for a so-called short squeeze. It occurs when a stock or other asset jumps sharply higher, forcing traders who had bet that its price would fall, to buy it in order to forestall even greater losses.
At that time, stocks of GameStop Corp (NYSE: GME) and AMC Entertainment Holdings Inc (NYSE: AMC) rallied to record highs. However, this buzz did not last long, and the stocks collapsed.
To avoid such situations, BUZZ ETF includes only stocks worth at least $5 billion. But Jamie Wise, founder and CEO of Buzz Holdings, noted that is not just a list of hot growth names. He said:
“There are growth stories that they expect to do well, but there’s also value sentiment, where stocks have fallen too far, and all the traditional reasons why people would be positive about a stock.”
Notably, BUZZ ETF is backed by Dave Portnoy, the founder of a famous sports and pop culture website Barstool Sports. With 2.3 million Twitter followers, he is a strong influencer who can shape the social conversation. Last year, he became a day-trading phenom as the COVID-19 pandemic forced sports betting to stop. He translated his notoriety with sports bettors to day traders, sharing his trading wins and losses every day on social media and YouTube.