A BUZ-Worthy ETF

Using social sentiment and data culled from various online platforms is a strategy applied by scores of high-level institutional and professional investors. In fact, some hedge funds are explicitly dedicated to such strategies.

The BUZZ US Sentiment Leaders ETF BUZ is an exchange-traded fund that makes stock selection based on social sentiment analysis accessible to everyday investors. BUZ, which debuted over two years ago, tracks the BUZZ Social Media Insights Index.

That index “covers over 50 million unique stock-specific data points from social media comments, news articles and blog posts, including media outlets like Twitter, Reddit, CNN Money, Motley Fool, The Wall Street Journal, Yahoo, Google, Bloomberg and Facebook, among others,” according to ETF Trends.

What Happened

The strategy offered by BUZ is proving efficacious. Year-to-date, the ETF is higher by more than 11 percent and is up nearly 30 percent over the past 12 months, putting it well ahead of the Nasdaq 100 Index over both time frames.

On Thursday, BUZ was one of 33 ETFs to hit all-time highs, doing so on volume that was more than quadruple the daily average.

Why It's Important

BUZ holds 75 stocks and the ETF rebalances monthly based on fresh social sentiment so it's sector agnostic. That said, investors that use platforms like Twitter or StockTwits know that certain stocks have a way of being in the spotlight for extended time frames. Often times, those are Internet and technology stocks.

BUZ reflects that notion by allocating nearly two-thirds of its combined weight to technology and consumer discretionary stocks, giving it sector composition that is comparable to a growth or momentum ETF.

BUZ holdings include NVIDIA Corporation NVDA, Apple Inc. AAPL, Amazon.com Inc. AMZN and Twitter Inc. TWTR.

What's Next

“BUZ employs leading edge analytics to harness the investment insights derived from vast datasets generated across online platforms and identifies 75 U.S. stocks with the most positive investment insights and sentiment measures,” according to ALPS.

This ETF would likely benefit from the growth and momentum factors regaining their footing and investors favoring tech stocks through the rest of 2018.

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