On Thursday, VanEck announced the launch of the VanEck Vectors Social Sentiment ETF (BUZZ), which provides investors value-added exposure to large cap U.S. stocks with the most bullish investor sentiment and perception.
“We are experiencing a monumental moment within the history of the retail investor—Twitter, Reddit, Stocktwits, and dozens of other platforms have established communities for investors to discuss stocks, and as a result of soaring online engagement, they have become an alternative dataset for investors to scour and utilize for a performance edge,” said Ed Lopez, Managing Director, Head of ETF Product for VanEck. “BUZZ empowers individual investors to potentially benefit from the predictive insights gained by measuring the collective convictions about stocks, ultimately building the benchmark for social sentiment.”
BUZZ seeks to track as closely as possible, before fees and expenses, the price and yield performance of the BUZZ NextGen AI US Sentiment Leaders Index (BUZZTR). This Index, which is rebalanced monthly, comprises the 75 large cap U.S. stocks that exhibit the highest degree of positive investor sentiment and bullish perception based on content aggregated from online sources, including social media, news articles, blog posts, and other alternative datasets.
Natural Language Processing
Millions of stock-specific messages and posts are filtered through an analytics model using Natural Language Processing technology to determine what the online community is saying about these stocks and whether the sentiment is positive, negative, or neutral on a collective basis. The Index’s proprietary model then scores and ranks each stock based on the degree of positive sentiment and breadth of the discussion. The stocks with the highest scores are selected for inclusion and weighted according to their rank.
“The real power of the Index is its ability to distill millions of diverse opinions into actionable stock picks. It can identify stocks poised for strong future growth potential as well as stocks that could be considered contrarian and discounted value opportunities,” added Lopez.
“We created the BUZZ Index in 2015 because we saw the potential of the data. Alternative data sets like this are also what sophisticated institutional investors are now pouring over to find an edge.” Said Jamie Wise, CEO of Periscope Capital, a Toronto-based hedge fund manager. “VanEck is the ideal provider to help make this kind of strategy accessible to the masses, and we’re excited to be working with them on this new ETF.”
BUZZ, which has an expense ratio of 75 bps, joins a strategic equity ETF suite that also includes VanEck’s “moat-focused” family of funds, such as the VanEck Vectors Morningstar Wide Moat ETF (MOAT), a $4 billion ETF designed to provide exposure to attractively priced companies with sustainable competitive advantages.
For more information, visit VanEck.com.
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