VanEck Associates on Thursday will introduce an exchange-traded fund that seeks to take advantage of commentary written about stocks on the Internet.
The VanEck Vectors Social Sentiment ETF (ticker: BUZZ) will track the BUZZ NextGen AI US Sentiment Leaders Index. That is slated to include the 75 most-favorably mentioned companies on the web.
The fund has an algorithm that chooses the stocks most intensely discussed in a positive manner on the Internet.
The search mechanism goes through news outlets, social media and blogs. The stocks must have a market capitalization of at least $5 billion.
“Twitter (TWTR) , Reddit, Stocktwits and dozens of other platforms have established communities for investors to discuss stocks,” Ed Lopez, head of ETF product for VanEck, said in a statement cited by Bloomberg.
“As a result of soaring online engagement they have become an alternative dataset for investors to scour and utilize for a performance edge.”
Further, "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," Lopez said.
TheStreet.com Founder Jim Cramer reacted positively to the fund. “I typically do not like ETFs that are an amalgam of oddball stocks. This one resonates with me,” he tweeted on Tuesday.
Meanwhile, Dave Portnoy, founder of Barstool Sports, promoted the ETF in a Twitter video Tuesday.
And Nobel laureate economist Robert Shiller has cited the importance of scouring through media sources new and old to get a better understanding of economic trends. BUZZ applies a similar idea to stocks.