A recently launched social media insights exchange traded fund (ETF) provides investors with a social momentum strategy that harnesses insights from big data mined from media outlets.
On a recent webcast, The Social Media Index: Today’s Market Sentiment Indicator, Jeremy Held, Director of Research & Investment Strategy at ALPS Portfolio Solutions, explained that the Sprott BUZZ Social Media Insights ETF (NYSEArca: BUZ) analyzes social media data to single out bullish investment perceptions on certain brands or companies.
Mining consumer data is nothing new, but using data analytics in an ETF index-based strategy is.
“Consumer product companies were the first to effectively use predictive analysis from social media to help them identify marketing insights and gain competitive advantages,” Jamie Wise, CEO and Founder of Buzz Indexes, said.
The investment industry has taken notice, implementing its own brand of data analytics. For instance, hedge funds, quantitative and fundamental managers are looking to social media analytics to enhance the investment process, Wise said. Bloomberg and Thompson Reuters now offer social analytics on their data terminals.
The Social Media Insights ETF also utilizes social analytics, identifying U.S. stocks with the most positive insights collected from social media.[related_stories]