Investors are apparently willing to pay 1-per-cent fees to trade against Jim Cramer as a bit. ¯_ (ツ)_/¯
The Inverse Cramer ETF (SJIM) and Long Cramer ETF (LJIM) launched yesterday. They are exactly what they sound like: Inverse Cramer shorts the CNBC host’s picks, while Long Cramer holds them.
Each fund has a 1.2-per-cent expense ratio, almost twice the average fee for an actively managed ETF. The average is 0.7 per cent, according to ETF.com. Guess it’s not cheap to hire someone to watch Mad Money daily!
SJIM saw 80,875 shares trade on Thursday, putting its volume above $2mn for the day. Activity was less busy in LJIM, with just 6,018 shares traded. Neither saw creations or redemptions on Day 1, according to Matthew Tuttle, head of the ETF’s advisory firm, but the high volume in SJIM could hint towards some flows in that fund today.
So how does all of this match up against other comparable ETFs? . . . what are the comparisons for an ETF that bets against a TV personality?
Luckily for us, the gimmick ETF launch is a well-trodden path by now. It helps to think of these vehicles as aspiring meme stocks; they attempt to cultivate the type of fan-base devotion that popped up organically for struggling retailers in 2020 and 2021.
But most of the time there’s a missing sentimental appeal in ETFs. The BlackBerry is now old enough to be kitsch or nostalgic — remember the keyboards?? — and a financial wrapper doesn’t carry the same appeal, at least for non-Alphavillains. And openly trying to monetise a fan base, subculture or political group can be tricky.
Take the Global X Millennial Consumer ETF (MILN), with its not-especially-subtle name and institutional sponsor. It traded 4,064 shares on Thursday, less than $150,000 in dollar terms, according to FactSet. The SHE-TF, the State Street fund marketed with the “Fearless Girl” statue, traded around 1700 shares Thursday, or $138,000.
Maybe the “anti-woke” ETFs make for a better comparison. They’ve been all over the headlines lately after their founder announced a run for president. Even so, the Strive US Energy ETF (DRLL) traded less than $1mn volume on Thursday, according to FactSet.
Not bad, but not Inverse Cramer’s $2mn-plus.
We can confirm that dunking on Cramer is fun, and a more entertaining schtick than owning the libs. It also makes for an appealing ETF set-up for the meme-stock crowd, because it can’t be easily reproduced.
That brings us to one fund that is arguably the quintessential meme ETF: The Short Innovation Daily ETF (SARK), built to trade against Cathie Wood and her ARK Innovation ETF.
SARK was also founded by Tuttle, who has since sold it to AXS Investments. Because it’s a daily inverse vehicle, it’s definitely not one for the buy-and-hold crowd, a fact that has probably juiced trading. SARK saw more than $180mn in trading volume yesterday, and has dropped 25 per cent over the past year. Of course, it’s not that hard of a trade to make independently; it just shorts one ETF. (Its volumes are almost certainly driven by the arbitrage against the heavily traded ARKK fund.)
Anyway, between SARK and SJIM, it seems that there’s at least one solid formula for meme-ETF success: Find a gimmicky finance personality, and set up a gimmicky strategy to dunk on them. Then charge 1.2-per-cent fees on your gimmick-of-gimmicks.
Do drop any more ideas into the comment box.
— The Inverse Cramer ETF might soon be a thing (FTAV)