Portnoy-Backed ETF Sees Third-Highest Volume Ever in a Debut
(Bloomberg) -- A new exchange-traded fund seeking to ride the companies most loved by investors online has found plenty of its own positive sentiment in its first day of trading.
About $438 million worth of shares in the VanEck Vectors Social Sentiment ETF (ticker BUZZ) changed hands on Thursday, making it the third best ETF debut on record, according to data compiled by Bloomberg.
“Normally, this kind of blow-the-roof-off volume for the first day is for ETFs that open up a new asset class like gold or Bitcoin,” said Eric Balchunas, ETF analyst for Bloomberg Intelligence.
The fund, which has been promoted by Barstool Sports Inc. founder Dave Portnoy, follows an index that uses AI to scan online sources like blogs and social media to identify the 75 most favorably mentioned equities.
Because of its criteria for inclusion, the hottest names among the day-trading crowd like GameStop Corp. and AMC Entertainment Holdings Inc. don’t actually make it into the gauge. Its top holdings currently are Ford Motor Co., Twitter Inc. and DraftKings Inc.
Nonetheless, the rapid uptake suggests VanEck has succeeded in tapping into the increasingly powerful retail investing cohort.
“Given the explosion of individual, younger retail traders, it makes sense to see a pile of volume,” said Dave Lutz, macro strategist at JonesTrading. “Whether it is the WSB crowd embracing Dave Portnoy’s marketing of the ETF, or institutions playing it to bet on the direction of the trend (or hedge) -- we won’t know for a bit. I suspect it’s a bit of both.”
The fund opened at $24.40. It was down 1% at $24.15 at 12:02 p.m.
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