With the markets pushing toward new heights, the Sprott BUZZ Social Media Insights ETF (NYSEArca: BUZ) has been capitalized on the recent hype, targeting companies that investors have been talking about.
BUZ analyzes social media data to single out bullish investment perceptions on certain brands or companies. The social media ETF would try to identify social momentum or prevailing trends of the masses as an indicator for future price momentum, and the strategy has recently paid off, with BUZ increasing 4.0% over the past week while the broader S&P 500 index gained 0.6%.
The BUZZ Social Media Insights ETF tries to reflect the performance of the BUZZ Social Media Insights Index, which identifies U.S. stocks that rank highest in terms of positive insight. These positive factors may include bullish investor perception, brand value perceptions and breadth of discussion from mentions on social media and other online media.
Mining consumer data is nothing new, but using data analytics in an ETF index-based strategy is. Consumer companies have utilized predictive analysis from social media to identify marketing insights and gain competitive advantages, and now, BUZ taps into the same methodology to find stocks gaining momentum among the investment community, using social analytics to identify U.S. stocks with the most positive insights collected from social media.
BUZ’s underlying index covers over 50 million unique stock-specific data points from social media comments, news articles and blog posts, including media outlets like Twitter, Reddit, CNN Money, Motley Fool, The Wall Street Journal, Yahoo, Google, Bloomberg and Facebook, among others. The dynamic universe will include 125 and 150 stocks to consider for inclusion.
“Continued increase in online discussion allows for a greater number of stocks for potential inclusion in the Index – all stocks that satisfy a minimum number of mentions are now included in the Index Universe,” according to Buzz Indexes.
The underlying index screens for multiple investments factors to select U.S. stocks that rank highest in terms of positive insight, including bullish investor perception, brand value perceptions and breadth of discussion from mentions on social media and other online media. The index would then end up with 75 stocks that exhibit the most positive insight scores and weighted by their insight score subject to a 3% maximum weight on a monthly basis.
Currently, BUZ’s top holdings include Nvidia 3.2%, Advanced Micro Devices 3.2%, Tesla Motors 3.2%, Valeant Pharmaceuticals 3.1% and Microsoft 3.1%. Top sector tilts include 27.9% technology, 24.5% health care, 17.3% consumer cyclical and 7.4% financial services.
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CORRECTION: Index update.