Dave Portnoy BUZZ ETF Rebounds with Healthcare Stocks

Mandatory Credit: Photo by Romain Maurice/SouthBeachPhoto/Shutterstock (10539363ae)Dave PortnoyPegasus World Cup, Hallandale Beach, Florida, USA - 25 Jan 2020.
Romain Maurice/SouthBeachPhoto/Shutterstock / Romain Maurice/SouthBeachPhoto/Shutterstock

The Dave Portnoy-backed VanEck Vectors Social Sentiment ETF (BUZZ), which started trading on the New York Stock Exchange in March, is rebounding thanks to healthcare stocks.

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The ETF seeks to track the performance of the 75 large cap U.S. stocks “which exhibit the highest degree of positive investor sentiment and bullish perception based on content aggregated from online sources including social media, news articles, blog posts and other alternative datasets,” according to the fund’s prospectus.

Shares of healthcare stocks were the leading positive contributors of stocks that advanced within the recent period between selection dates of the BUZZ Index, according to a VanEck blog post. VanEck added that with the widespread rollout of vaccines by various biotech companies, it was expected that the major pharmaceutical stocks would benefit significantly.

“The rising spread of the COVID-19 Delta variant focused investor attention on the sector amidst discussions of additional booster requirements, which may be required to slow the effects of the variant’s spread,” according to the post. “It was only a matter of time before the healthcare stocks began to gain momentum once again.”

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The ETF’s top contributors for the July 8- August 21, 2021 period included Novavax and Moderna.

Companies such as Moderna and Pfizer (NYSE: PFE), which have already been rallying over the past year, have experienced near parabolic gains over the past two months as the financial impact from the sale of vaccines materialized far above analyst estimates, according to the blog post.

“The focus for investors now shifts to the sustainability of revenues from the vaccines going forward. Pfizer has already announced it expects to recommend a third booster shot later this year while increasing case numbers of virus variants will likely keep the demand for additional vaccines high,” according to the post. “Positive investor sentiment has increased along with the companies’ share prices. The overall weight of healthcare sector stocks in the BUZZ Index increases from 5.7% to 9.8%, pointing to accelerating investor confidence in the sector.”

In a video posted on Twitter in March, Barstool Sports founder Portnoy said about the ETF that “I got approached by these guys who built an algorithm five years ago. The algorithm was basically designed to scrape the internet, social media to find positive sentiment on stocks. It kind of lingered, it did its thing.”

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Portnoy added that then, “COVID happened…The amount of chatter on the internet about stocks exploded.”

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The ETF’s stocks also include Tesla, Twitter, Facebook, Amazon, Pinterest, Virgin Galactic and DraftKings according to its prospectus.

Millions of people use social media and other online platforms to express opinions and share ideas — including those related to their stock portfolio. The vast amount of content generated across these platforms contains valuable insights that can help investors gain a potential edge over the broader market,” VanEck said in a blog post at the time.

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About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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