BUZZ ETF dips in trading debut as investors pass on internet-favorite stocks

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  • The VanEck Vectors Social Sentiment ETF, which trades as BUZZ, fell as much as 3.4% in its trading debut.
  • The ETF follows an index that scrubs internet platforms for stocks enjoying strong positive sentiment.
  • Barstool Sports founder Dave Portnoy endorsed the fund on Tuesday, praising it as an effective tool for tracking online traders’ favorite picks.
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The VanEck Vectors Social Sentiment ETF, an exchange-traded fund that follows stocks trending online, dropped as much as 3.4% on its first day of public trading.

The ETF, which trades under the ticker BUZZ, aims to capitalize on the growing use of online platforms as a sounding board for trade ideas. The fund tracks an index that scrubs websites like Reddit, StockTwits, and Twitter to determine which stocks are garnering the most positive sentiment online. Holdings are then weighted accordingly.

Twitter, DraftKings, and Ford are the fund’s biggest holdings as of Thursday. That lineup will be rebalanced each month to better adhere to online stock-search trends.

BUZZ traded at $US23.61 ($30) per share as of 11:05 a.m. ET.

The ETF’s debut comes roughly one month after day traders congregating on r/WallStreetBets collectively drove GameStop shares to dizzying heights. Other so-called meme stocks including AMC, Express, and Koss also rallied as the trend fueled unexpected volatility. The stocks’ surge reversed soon after, but the price action left a lasting impact.

The Reddit-trader phenomenon prompted Wall Street to pay more attention to online chatter. Hedge funds created tools for monitoring posts on Wall Street Bets and other forums, both to protect their own short bets and see where the day traders could strike next.

Investors looking to use BUZZ to profit from the online traders’ rapid-fire moves are likely out of luck. The ETF’s underlying index of online chatter measures conversation on stocks over a 12-month period, therefore leaving out whatever may be the next GameStop or AMC. Companies must also have a market capitalization of at least $US5 ($6) billion to be included in the 75-stock ETF.

The ETF still has backing from one of the more internet-savvy day traders. Barstool Sports founder Dave Portnoy endorsed the fund in a Tuesday video, praising the instrument as an effective way to bet on the internet’s favorite equities.

“There is a new ETF launching that I’m a part of, that I’m putting my face behind, my reputation behind,” Portnoy said.

Portnoy’s popularity surged through the pandemic after starting Davey Day Trader Global, a live-stream hosted by the Barstool founder that featured him making quick bets in the stock market. The show preceded the January GameStop phenomenon and has since been viewed as a sign of retail investors’ new prominence in the market.

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