After staying calm for a few months, the craze for meme stocks roared back with U.S. equities nearing record highs. This is especially true as the most popular meme names such as videogame retailer GameStop, movie theater operator AMC Entertainment Holdings and Blackberry.
Inside Meme Investing
Meme investing is a new concept in the equity world and has gained popularity among the youth in recent months. Meme stocks are those that grabbed immense investor interest due to hype on social media and online forums like Reddit, WallStreetBets and Robinhood, rather than the company fundamentals, resulting in a surge in volumes and share price. Thus, these are considered speculative.
Meme stocks are triggered by small traders who cause a short squeeze on the stock. Short squeeze is a term used by market participants to refer to a phenomenon where short sellers in a stock, who have placed their bets on its fall, rush to hedge their positions or buy the stock in the event of an adverse price movement, in order to cover their losses. This leads to a sharp rise in demand for shares, and a huge rally in share prices.
However, investing in these stocks is a risky choice and could result in heavy losses. This is because when excitement surrounding the stock cools down, it could lead to a freefall in share price and investors end up losing their capital.
In order to capitalize the fervor of meme stocks, Van Eck Asset management launched BUZZ ETF, in february 2021, that could lower the risk of investing in a single stock. It offers investors a new tool for leveraging the retail trading boom by investing in all the buzziest “meme stocks” and funds.
BUZZ ETF tracks an index that captures and analyzes millions of interactions across social media platforms, news articles, blog posts and other content from online sources to measure stock specific sentiment. It leverages this data to identify stocks with the highest degree of positive investor sentiment and perception to provide the most upside return potential.
- Retail investors are a powerful force; they have demonstrated that they have the knowledge to outsmart Wall Street.
- Market sentiment is tracked by monitoring millions of interactions that take place across the wide array of online platforms that have fostered communities for investors to engage with one another and discuss various aspects of investing.
- Index inclusion is selective, based on a long and consistent track record of discussions.
BUZZ NextGen AI US Sentiment Leaders Index (BUZZTR)
Find below some details of the BUZZ ETF (as of 30/09/2021)
Market Cap Allocation (Bn USD)
Performances compared to Peers (in USD)
– 100 basis point – as of 30/09/2021