An ETF that generated headlines in October 2022 is shutting down. The ETF gave investors a way to bet against investor and television personality Jim Cramer.
Here are the details and why the decision to shut the fund was made.
What Happened: First announced in October 2022, Tuttle Capital launched two ETFs to track the stock picks of Cramer. One was to the long side betting on his stock picks made on television and X and one was to the short side betting against the picks made by Cramer, commonly known as Inverse Cramer.
The Long Cramer ETF was shut down in September 2023 and the Inverse Cramer now follows the same path. On Thursday, it was announced that the Northern Lights Fund Trust IV Inverse Cramer ETF SJIM will be shutting down and liquidating.
The board of trustees of the fund determined liquidation was in the best interest of shareholders. The last day of trading for the ETF will be Feb. 13. The fund is expected to distribute proceeds to shareholders on Feb. 23.
"We started (the fund) in order to point out the danger of following TV stockpickers, Jim Cramer specifically, and the total lack of accountability," Tuttle Capital CEO Matthew Tuttle said.
Tuttle said he feels like that mission was accomplished, "but retail investors are more focused on volatile products" and interest in the portfolio didn't fully materialize.
"A lot of the success or failure of an ETF is timing and the timing with what has happened with the Magnificent 7 didn't work out," Tuttle told Benzinga, referencing Cramer’s recommendations of the high-flying stocks.
The Magnificent 7 references the stocks of Apple, Amazon, Alphabet, Microsoft, NVIDIA, Meta Platforms and Tesla.
"Interestingly, with how the Mag 7 have done SJIM should be down like 75%. The fact that it isn't is testament to Jim's stock picking availability."
Tuttle used the analogy of "a broken clock is right twice a day" and the Magnificent 7 stock picks by Cramer being right.
Related Link: Betting Against Jim Cramer Now A Reality: What Investors Should Know About The Inverse Cramer ETF (And Long Cramer ETF Too)
Why It's Important: Tuttle isn't done writing about Cramer and will continue to write the Cramer Tracker newsletter.
Tuttle also told Benzinga he's open to doing the fund again but it's hard with Cramer recommending the Magnificent 7 stocks.
"With the success of the T-REX product line, and the other initiatives we are involved in, we just didn't have the time to keep running this portfolio," Tuttle said.
Tuttle said the T-REX ETFs have over $200 million in assets under management.
Tuttle Capital recently launched the Tuttle Capital 2X Inverse Regional Banks ETF SKRE, which allows investors a leveraged inverse investment option to bet against the performance of regional banks and seeks to outperform the SPDR S&P Regional Banking ETF KRE.
“When Jim Cramer recommended buying Silicon Valley Bank there wasn’t an ETF that allowed you to short regional banks. Now there is. $SKRE provides 2x the inverse return of the SPDR S&P Regional Banking ETF. The next time Jim tells you to buy a regional bank you will be ready,” Tuttle tweeted.
Tuttle previously told Benzinga that Cramer recommending SVB Financial Group stock one month before the bank’s collapse was another reason people should bet against him.
“SIVB is just another example of the reverse Midas touch and why there is such a desire to bet against him,” Tuttle told Benzinga.
Tuttle Capital launched leveraged and inverse ETFs for Tesla and NVIDIA in October 2023.
Those ETFs are:
- T-Rex 2X Long Tesla Daily Target ETF TSLT
- T-Rex 2X Inverse Daily Target ETF TSLZ
- T-Rex 2X Long NVIDIA Daily Target ETF NVDX
- T-Rex 2X Inverse NVIDIA Daily Target ETF NVDQ
Tuttle has also filed for leveraged Bitcoin ETFs and said he has another project that could be announced in April.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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