BUZZ, the Darlings Social-Media ETF, is debuting in trading

Investors hoping to use the ETF to jump into the recent madness of GameStop Body.

and AMC Entertainment Holdings Inc.

but he will be very disappointed. The ETF has 75 shares, but the video game distributor and the shares of other companies in the epicenter of the recent Reddit trading frenzy are not included.

Jamie Wise, founder of Buzz Indexes, which also runs a hedge fund strategy in Toronto, said this was due to GameStop, AMC and other retailers buzzing that they did not meet the indexing criteria on which they are based. ETF.

Companies trading on major US stock exchanges with market values ​​of at least $ 5 billion are the initial barriers to entry, and a GameStop has failed to meet since the last quarterly rebalancing of the index on January 1, Mr Wise said . GameStop’s market cap was $ 9.2 billion on Thursday and rose to $ 22.7 billion at the end of January.

In addition, constituents need to see at least $ 1 million in average daily trading volume and be constantly talked about on social media for a longer period of time. Exactly how many mentions are part of the secret sauce of Buzz Indexes.

However, the fund includes several other popular shares among RedSit’s WallStreetBets and Twitter residents. There is the electric car manufacturer Tesla Inc.,

developer fuel cells Plug Power Inc.

and the online gambling site DraftKings Inc.

But there are also a variety of stable stocks, including Ford Motor Co.

, Pfizer Inc.

and Boeing Co.

That range of shares proved vulnerable to the continued withdrawal of the market. The recent rise in Treasury yields, along with expectations for strong economic growth this year, has forced investors to reassess how much they have exposed to equities. This was largely to the detriment of technology stocks and other types of growth, many of which make up BUZZ.

Market shares recorded additional losses on Thursday as this change continued. The ETF was down 3.6% at the start of its trading, worse than the S&P 500’s 1.3% slip. PlugPower was down more than 8%, while Tesla and DraftKings were down 4.9% and by 5.8%.

“They are currently in a difficult environment,” Mr Wise said of some of the fund’s members.

This is the second reference tool for Mr Wise’s index. An earlier incarnation was used in the Sprott Buzz Social Media Insights ETF. It was launched in 2016, managed to surpass the S&P 500 in certain periods, but never got much fanfare. At the time, the asset manager closed the fund after raising only $ 8.8 million, well below the viability level for an ETF.

This time, Wise and Lopez say the time is right for an ETF built on social media hype. With no risk, Mr. Wise brought in Dave Portnoy, the founder of Barstool Sports Inc., who also considers himself a crazy trader and uses social media to promote his wild bets.

Mr. Portnoy, a partial owner of Buzz Indexes, has been promoting ETFs all week since he stepped on his podium in the style of a water cooler in a video explaining how the fund works, how he got involved, and finally why of online followers should buy it.

“They showed me their algorithm. I said, “It’s great, of course it will work,” Portnoy said in the video. “Twitter, social media, everything dictates stock prices.”

Mr Wise said the decision to bring Mr Portnoy – who changed his Twitter profile photo with the ETF logo, a drawing of a bee – was crazy. “He is a voice among millions in the online community,” he added.

Mr Lopez, from Van Eck, said Mr Portnoy had no affiliation with the company, only the index provider.

Mr Portnoy continued to support ETFs on Thursday, even as the red crossed the stock market.

“If you don’t think what’s happening with $ BUZZ right now isn’t showing me and Barstool’s strength, I don’t know what to tell you,” Portnoy tweeted, adding, “* I’m not a financial consultant.”

Write to Michael Wursthorn at [email protected] and Sebastian Pellejero at [email protected]