The frantic price action in stocks like GameStop Corp. has led numerous retail brokerages in recent days to impose a number of restrictions on trading activity.
But there are still a number of ways investors can gain exposure to GameStop GME,
and other companies such as AMC Entertainment Holdings, AMC,
even through analysts, it warns investors to exercise more than a little caution.
“People who own or intend to buy them should be aware of the risk they take,” Todd Rosenbluth, head of ETFs and mutual fund research at CFRA Research, said in an email.
Read: Here are the biggest short tablets on the stock market, including GameStop and AMC
“If I think GME will grow, then this is their call, even if we have a recommendation to sell in stock. “People think that indexed ETFs are static, but they clearly aren’t,” he said.
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Rosenbluth’s comments serve as an appeal to investor awareness, including about what they own. They come in a battle between individual investors and hedge funds on Wall Street, which has been raging for days, causing negative effects on the markets.
On Wednesday, GameStop closed at a record high of $ 347.51, after a 135% increase, while AMC shares quadrupled in price. The unusual price action makes people on and off Wall Street worry that a gang of investors encouraged by conversations on chat forums like Reddit could wreak havoc on the market.
“Investors looking for the benefits of diversifying ETFs must be
aware of what is inside to avoid taking an unjustified risk “, wrote Rosenbluth from CFRA.
For example, he mentioned that the popular SPDR S&P Retail Fund XRT fund,
which is usually called by its XRT symbol, saw a big jump in GameStop as a proportion of its holdings, by its stratospheric rise, representing 20% of the fund.
ETF.com
“Equally weighted XRT is now dominated by GME,” Rosenbluth wrote in a note.
CFRA also says that Wedbush ETFMG Video Games Tech ETF GAMR,
has a position of 14% in GameStop.
Another thing to consider, Rosenbluth said, is that when you follow ETFs for exposure to GameStop or other popular actions highlighted by online forums, it is that some ETFs are now underexposed GameStop and others due , following their sudden growth.
GameStop’s market value was $ 17 billion at the last check, after reaching a maximum market level of about $ 24 billion on Wednesday, an impressive increase from its estimated $ 1.3 billion at the beginning of 2021.
Other GameStop exposure ETFs include Direxion Daily Retail Bull 3x RETL Shares,
Invesco S&P SmallCap with Momentum ETF XSVM,
Invesco S&P SmallCap 600 RWJ Revenue ETF,
and Invesco S&P SmallCap Consumer Discretionary ETF PSCD,
ETF.com
For AMC Entertainment Holdings, there are 27 ETFs that have exposure, with IQ Chaikin US Small Cap CSF ETF,
The leading low-capitalized multi-factor ETF in the United States,
Schwab Fundamental US Small Company Index FNDA,
and Invesco RAFI Strategic US ETF IUSS,
representing the top funds, according to ETF.com.
In Thursday’s trade, markets mostly tried to escape a sizeable recession on Wednesday, partly inspired by concerns about knock-on effects from wild trading AMC, GameStop and others.
Dow Jones Industrial Average DJIA,
and the S&P 500 SPX index,
they were going higher and were on the verge of recovering much of the losses from the worst one-day landslide in three months.