A long/short smart-beta index is in talks with fund issuers to launch an exchange traded fund based on financial twitter user sentiment.
Market Prophit, the company behind the recently launched Market Prophit Social Media Sentiment Index (CROWD), is trying to find an ETF backer for its twitter-based index, reports Eric Balchunas Bloomberg.
“This is a long/short smart beta-style index that aims to capture surgically the so-called sentiment factor on Twitter,” Balchunas said.
The index will be calculated by S&P Dow Jones Indices based on corporate action data and Market Prophit’s proprietary sentiment data, according to a May press release.
“There has been an explosion of market-moving chatter in social media and Market Prophit has been providing information on social-sentiment to investors both through our platform as well as our API. Now the wisdom of these crowd-sourced opinions can be made available to investors through ETF sponsors, financial institutions, and other third party providers. Our new index reflects the real-time pulse of the market,” Igor Gonta, CEO of Market Prophit, said in the previous press release.
Specifically, the index is comprised of the 25 most mentioned companies in social media chatter and rebalanced on the sentiment of the chatter. The index will then take long or short positions based on the sentiment from the Twitter users on a daily basis.