Roundhill launches ETF for tracking meme stocks and retail investing trends
Roundhill Investments has relaunched a exchange-traded funds it closed two years ago. The fund is designed to track a constantly changing universe "meme" stock and the activities retail investors who love these stocks.
The Roundhill Meme Stock ETF is a new actively managed fund that trades under the symbol MEME. It aims to capitalize on the trend that has periodically gripped U.S. traders since the pandemic when new retail investors began using social media platforms such as Reddit to discuss their investment theories and to share their top stock picks.
Roundhill launched its ETF for the first time in 2021, to capitalize on that initial wave of meme stocks exuberance. This was dominated by movie theater chain AMC Entertainment as well as GameStop. The fund was closed two years later due to waning investor interest.
Sumit Roy is an analyst for ETF.com. He said that the previous ETF was a fund which relied heavily on social media mentions as well as short interest in order to build its portfolio. Roy explained that the new ETF emphasizes volatility and trading volume. The ETF will be actively-managed and can rebalance up to once a week in order to keep pace with the latest changes and twists in the world meme stocks.
The current ETF Portfolio includes companies such as residential real estate platform Opendoor Technologies and fuel cell technology venture PlugPower, as well quantum computing stocks such Rigetti.
Dave Mazza is the CEO of Roundhill. The structural drivers are what creates the recurring enthusiasm of retail investors for a variety of concepts. He said that these drivers ranged from the launch of commission-free platforms to the creation online communities for retail investors.
He added that the new ETF will include "the companies which become cultural and market touchpoints."
Morningstar analyst Dan Sotiroff places the revamped ETF into the thematic ETFs category, which he believes tends to underperform in the long term.
This group accounts for between 10% and 20% of trading, according to analysts, academics and trading groups who have studied this growth.
Marco Iachini is senior vice president at Vanda Research and said that the figure was significantly higher when it came to stocks that captured the imagination of retail investors, such as meme stocks.
(source: Reuters)