“Despite the massive growth potential of the space, a video game ETF doesn’t necessarily scream ‘sophistication’ to end clients,” he said.ĭon’t miss out on ET Prime stories! Get your daily dose of business updates on WhatsApp. “A simple story can be tremendously compelling,” he said, “whether we’re talking about work from home or getting groceries delivered or increases in online shopping.”Īlthough some money managers use thematic products, a fund’s short track record and small asset base might be deterrents, according to Nate Geraci, president of investment-advisory firm the ETF Store. Retail investors are using thematic ETFs to both reap the benefits of fast-changing technologies and invest in narratives that they’ve been gripped by, according to Scott Helfstein, executive director of thematic investing at ProShares Advisors LLC. According to Stash Capital, which has an investing app for beginners, about 88% of all investors in the Wedbush ETFMG Video Game Tech ETF (GAMR) are retail traders. Still, observers say general interest in thematics is growing. In fact, just this month Goldman Sachs merged five uniquely-thematic ETFs together into the Innovate Equity ETF (GINN). “Theme ETFs have long history of going one level too niche,” said Eric Balchunas, an analyst at Bloomberg Intelligence, Meanwhile, firms that slice the pie too thin may find few takers. BlackRock’s iShares thematic funds are deemed “megatrends,” while State Street calls theirs “new economy” ETFs.
#ROBINHOOD BLOCKS GAME CRACKED#
product segments in the firm’s ETF and Index Investments Group.įor now, only five ETFs cracked the top 30 securities traded by Fidelity clients, and none of them are thematics.Ĭomplicating matters is the fact that some issuers don’t use that label. “These are themes that many investors intuitively want to play but don’t necessarily have the conviction to pick a particular stock,” said Framsted, head of U.S. While this particular case is getting a lot of press, it’s not unusual for a brokerage firm to restrict trade when borrowing money," Hughen said.Sara Rosalia, a 19-year-old financial influencer known as Sara Finance to her more than 660,000 followers on social media, says that she often recommends ETFs, since “a lot of my followers are younger too, so they don’t want as much risk.” Her favorite is the ARK Innovation ETF (ARKK), the largest thematic fund with almost $11 billion in assets.Īccording to BlackRock’s Holly Framsted, one of the reasons thematic ETFs are becoming important building blocks is that they can add megatrends to portfolios. "I think Robinhood is probably doing what they need to do in order to keep their investors and their clients safe. Hughen said it's not the first time trading companies have halted the ability to buy stocks. "Honestly, when I got denied I was like, 'oh well, I guess I don’t get to be in on the fun,'" Kelley said. Thursday morning he found out the transaction didn't go through. The meteoric rise in stock prices caused trading apps like Robinhood to press the pause button.Īlex Kelley tried to buy a modest $150 worth of stock Wednesday night on Robinhood's app. They haven’t suffered as much from the pandemic as many people in lower income brackets," Hughen said. State footballs Jordan Travis and Jared Verse speak following spring game. "A lot of high net worth individuals have had much invested in the stock market, and they’ve been able to work from home. After days of rallies fueled by Redditors, investment app Robinhood has. Hughen calls this act from the Reddit group symbolic of what's going on in society during the pandemic. "What many hedge firms have had to do is buy it back at a much higher price resulting in massive losses for many people who are investors in these hedge funds," said Chris Hughen, associate professor of finance at Denver University.
Large investors sometimes borrow shares in hopes of selling high back to the lender and then buy it back in the future at a lower price. That Reddit group of investors bought a lot of stock of those companies because Wall Street bet against them. The group's creator spoke to CNN this week saying even he was surprised how quickly this took off.
"Emotions are your biggest enemy, emotions and expenses, when it comes to investing," Roth explains.Įmotion is what played a part as to why a small subgroup of Reddit users began buying up the stock of some struggling companies like Game Stop, AMC and Nokia.
He cautions possible investors not to buy into the hype. Roth started Wealth Logic, an hourly based financial investment firm. "I would really tell people not to buy GameStop or anything that is surged as much as it has for any reason," Allan Roth said. It was almost game over for Game Stop, until a group of investors on the social media platform Reddit band together to put the squeeze on Wall Street.
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