ETFs

BUZZ Investing: Plug Power Provides a Jolt Amid Macro Pressures

Political grandstanding in Washington pointed to yet another legislative showdown along partisan lines as a key deadline to raise the current debt ceiling approached. The fallout from China’s renewed hardline regulatory stance toward technology and other for-profit businesses, together with the potential default of a large Chinese property developer stoked fears of potential contagion across global markets. Surging COVID-19 delta variant cases resulted in lowered global growth expectations amid supply chain shocks. Finally, U.S. central bankers appeared to rethink the ‘transitory’ nature of their inflation expectations as they indicated a readiness to reversing pandemic stimulus programs as early as November, while guiding to an accelerated timeline for increasing the Fed Funds rate relative to earlier expectations; a decidedly hawkish tone, which caught many market participants off-guard. The confluence of the above events led to heightened investor anxiety, resetting global equities lower.

The BUZZ NextGen AI US Sentiment Leaders Index (the “BUZZ Index” or “Index”) returned -6.46% during the month of September and trailed the S&P 500 Index by 1.60% year to date (14.32% vs. 15.92%, respectively) but led by 11.65% over the last year (41.65% vs. 30.00%, respectively) as of the end of the month. Continue reading for details on recent performance and the latest Index reconstitution.

Plug Power Leads Advancing Stocks within the BUZZ Index

Plug Power (NASD: PLUG) led advancing stocks during the recent period between selection dates of the BUZZ Index1. PLUG was first featured within the BUZZ Index during the October 2020 monthly reconstitution, debuting at a 2.39% weight. PLUG is a leading provider of comprehensive hydrogen fuel cell turnkey solutions. The company is focused on hydrogen and fuel cell systems that are used to power electric motors primarily in the electric mobility and stationary power markets. PLUG was trading near $17 per share when it first entered the BUZZ Index and over the course of the past year the stock has experienced significant volatility as investors rushed to gain exposure to alternative energy providers amidst the EV mania in late 2020 and early 2021. As the euphoria within the market segment cooled, shares of PLUG consolidated into a narrow trading range around $25. The shares recently broke to the upside, rallying over 30% as the company announced two new partnerships. The first, with refiner Phillips 66 (NYSE: PSX), is to explore ways to deploy PLUG Power's technology within Phillips 66's operations, while the second, with aircraft maker Airbus (Euronext Paris: AIR), sees the commercial aerospace giant and PLUG working together to investigate green hydrogen for use in air transportation.

Top Contributors: September 9, 2021 – October 14, 2021
Company Ticker Average Weight (%) Return Contribution (%)
Plug Power Inc PLUG 2.90 0.83
Digital Turbine Inc APPS 1.50 0.45
Ford Motor Co F 1.50 0.28
Tesla Inc TSLA 3.21 0.26
Opendoor Technologies Inc OPEN 0.78 0.19
Advanced Micro Devices Inc AMD 3.06 0.18
General Motors Co GM 0.78 0.13
Uber Technologies Inc UBER 0.71 0.11
Netflix Inc NFLX 1.72 0.11
salesforce.com Inc CRM 0.76 0.10

Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein. For a complete list of holdings in the ETF, please visit www.vaneck.com.

Biotech stocks Novavax (NASD: NVAX) and Moderna (NASD: MRNA) paced the top detractors from performance during the period between the September and October selection dates of the BUZZ Index. The COVID-19 pandemic fueled the growth and profitability of many biopharma companies that benefited from the development of vaccines and treatments against the novel coronavirus. Merck & Co. (NYSE: MRK) served as a catalyst for a broad sell-off in shares of COVID-19 vaccine manufacturers as the company, together with its partner Ridgeback Biotherapeutics, announced that their experimental drug Molnupiravir, an oral antiviral medicine, significantly reduced the risk of hospitalization or death in findings from a planned interim analysis of the phase 3 trial in at-risk, non-hospitalized adult patients with mild-to-moderate COVID-19.

Bottom Contributors: September 9, 2021 – October 14, 2021
Company Ticker Average Weight (%) Return Contribution (%)
Novavax Inc NVAX 2.50 -1.05
Moderna Inc MRNA 2.72 -0.85
DraftKings Inc DKNG 2.23 -0.59
AMC Entertainment Holdings AMC 2.89 -0.59
Peloton Interactive Inc PTON 1.35 -0.33
Pfizer Inc PFE 2.73 -0.25
Facebook Inc FB 1.77 -0.24
Palantir Technologies Inc PLTR 3.08 -0.21
ContextLogic Inc WISH 0.42 -0.21
GameStop Corp GME 3.04 -0.21

Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein. For a complete list of holdings in the ETF, please visit www.vaneck.com.

Sentiment Stock Highlight: SPAC-Related Companies

Special Purpose Acquisition Corporations (“SPACs”) are an increasingly utilized structure in which ‘blank-check’ style companies raise cash with the goal of identifying a private company with which to merge. The process, referred to as a “Qualifying Transaction”, seeks to establish a faster, more efficient path for private companies to begin their public life, relative to a traditional IPO process. During 2020, SPACs shot into the investing spotlight, and after years of being a niche product, surged in popularity after the COVID-19 crash. Many companies which were brought public via SPAC Qualifying Transactions posted huge gains, notably those from the electric vehicle industry. Investors, lured by a SPAC’s upside optionality and capped downside risk, began to flood into the SPAC market, resulting in a year of record issuance.

In January 2021, the BUZZ Index monthly rebalance and reconstitution saw three stocks enter the Index that began their public lives through SPAC Qualifying Transactions; space technology company Virgin Galactic (NYSE: SPCE), online sports entertainment company Draftkings (NASDAQ: DKNG), and electric vehicle company Nikola Corp (NASDAQ: NKLA). As their share prices soared, the amount of online conversation and level of positive investor sentiment surrounding these companies also exploded higher. Since then, SPAC issuance and capital activity has remained robust. So far in 2021, over 470 SPACs have completed an IPO raising a staggering $134B in proceeds to hunt for Qualifying Transactions. Deal announcements have also occurred at a record pace, with hundreds of SPACs announcing or closing previously announced Qualifying Transactions. Two former SPACs which closed Qualifying Transactions are featured as first-time entrants within the BUZZ Index during the October monthly reconstitution, ChargePoint Holdings Inc. (NYSE: CHPT), formerly Switchback Energy Acquisition Corp. (NYSE: SBE), and UWM Holdings Corp. (NYSE UWMC), formerly Gores Holdings IV Inc. (NYSE: GHIV).

Shares of ChargePoint and United Wholesale Mortgage trended in opposing directions following the closing of their Qualifying Transactions. ChargePoint and Switchback announced their deal in Q4 2020 and amidst the ensuing frenzy for all things “EV”, the stock soared, rising four-fold ahead of the closing of the transaction in Q1 2021. Since the transaction closed and SBE transitioned to CHPT, the shares have been range bound yet still roughly doubled their value from the initial level of the SBE SPAC before the merger was announced. United Wholesale Mortgage likewise announced their transaction with Gores Holdings in Q4 2020; however, following a brief push higher, UWMC stock has trended consistently lower, post deal close and now trades roughly 30% below the level of GHIV SPAC before the merger was announced. While both stocks have performed in different directions, they share one common theme, online investors are positive regarding the company’s prospects and as a result, both enter the BUZZ Index for the first time in October.

ChargePoint (CHPT) Stock Price: September 18, 2019 - October 15, 2021

ChargePoint (CHPT) Stock Price: September 18, 2019 - October 15, 2021

Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein. For a complete list of holdings in the ETF, please visit www.vaneck.com.

United Wholesale Mortgage (UWMC) Stock Price: March 24, 2020 - October 15, 2021

United Wholesale Mortgage (UWMC) Stock Price: March 24, 2020 - October 15, 2021

Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein. For a complete list of holdings in the ETF, please visit www.vaneck.com.

BUZZ Index October 2021 Rebalance Highlights

Affirm Holdings

This month the BUZZ Index features numerous first-time entrants including Affirm Holdings (NASDAQ: AFRM). Founded by PayPal co-founder Max Levchin in 2013, for years AFRM has been trying to position itself as a leader in the growing "Buy Now, Pay Later" segment within e-commerce, offering customers loans and installment options on purchases. AFRM completed its IPO in January 2021 and the stock quickly rose to $90 per share, almost double its IPO price of $49. The stock continued to rally until mid-February then proceeded a month long decline, consolidating within a range of $60 per share through the summer months. AFRM surprised many by announcing a partnership arrangement with Amazon.com (NASD: AMZN) on August 30, 2021. The arrangement proved to be a vote of confidence in AFRM’s business model, and the stock has since more than doubled. Volume across social media platforms has been increasing for months, and sentiment has been heavily bullish, suggesting this may be the beginning of a long-term uptrend. This month, AFRM jumps into the BUZZ Index with a maximum 3% weight.

Coinbase

In July 2021, the BUZZ Index first featured MicroStrategy (NASDAQ: MSTR), a dot-com era technology company that had pivoted its business model to devoting its capital to buying and holding Bitcoin. This month, the BUZZ Index features another cryptocurrency play - this one in the form of one of the most popular crypto exchanges in the U.S., Coinbase (NASDAQ: COIN). Created in 2012, Coinbase was recognized as one of the most legitimate exchanges in the "wild west" cryptocurrency space, providing millions of retail investors access to Bitcoin. Its IPO in April 2021 proved ill-timed, as Bitcoin experienced a 50% decline in value just one month post COIN’s IPO, bringing down all crypto-related stocks. Bitcoin has since erased those losses and is once again nearing its all-time highs. As Bitcoin has rallied, COIN has begun to trend higher as well. Investor sentiment towards the stock has likewise been bullish, sending COIN into the BUZZ Index this month for the first time at a 2.11% weight.

For more on the rebalance results, view the BUZZ Index reconstitution report.

Originally published by VanEck on October 22, 2021.


Important Disclosures

1 Period between September 9th, 2021 – October 14th, 2021.

Definitions: The S&P 500 is a stock market index of 500 of the largest companies listed on stock exchanges in the United States. The Nasdaq Composite Index is a stock market index that consists of the stocks that are listed on the Nasdaq stock exchange.

This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of 3rd party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck.

An investor cannot invest directly in an index. Returns reflect past performance and do not guarantee future results. Results reflect the reinvestment of dividends and capital gains, if any. Certain indices may take into account withholding taxes. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.

BUZZ NextGen AI US Sentiment Leaders Index (the “BUZZ Index”) is a product of BUZZ Holdings ULC (“BUZZ Holdings”), and has been licensed to Van Eck Associates Corporation for use in connection with the VanEck Social Sentiment ETF.

BUZZ” is a trademark of BUZZ Holdings, which has been licensed by Van Eck Associates Corporation for use in connection with the BUZZ Index.

VanEck Social Sentiment ETF is not sponsored, endorsed, sold or promoted by BUZZ Holdings, or its shareholders, or the licensor of the BUZZ Index and/or its affiliates and third party licensors. BUZZ Holdings makes no representation or warranty, express or implied, to the owners of the VanEck Social Sentiment ETF or any member of the public regarding the advisability of investing in securities generally or in VanEck Social Sentiment ETF, particularly or the ability of the BUZZ Index to track general market performance.

BUZZ Holdings’ only relationship to Van Eck Associates Corporation with respect to the BUZZ Index is the licensing of the BUZZ Index and certain trademarks of BUZZ Holdings. The BUZZ Holdings are determined and composed by BUZZ Holdings without regard to Van Eck Associates Corporation or the VanEck Social Sentiment ETF. BUZZ Holdings has no obligation to take the needs of Van Eck Associates Corporation or the owners of VanEck Social Sentiment ETF into consideration in determining and composing the BUZZ Index.

BUZZ Holdings are not responsible for and have not participated in the determination of the prices of VanEck Social Sentiment ETF or the timing of the issuance or sale of securities of VanEck Social Sentiment ETF or in the determination or calculation of the equation by which VanEck Social Sentiment ETF securities may be converted into cash, surrendered, or redeemed, as the case may be. BUZZ Holdings have no obligation or liability in connection with the administration, marketing or trading of VanEck Social Sentiment ETF. There is no assurance that investment products based on the BUZZ Index will accurately track index performance or provide positive investment returns.

BUZZ Holdings is not an investment advisor and the inclusion of a security in the BUZZ Index is not a recommendation by BUZZ Holdings to buy, sell, or hold such security, nor should it be considered investment advice.

BUZZ HOLDINGS DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE BUZZ INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION WITH RESPECT THERETO, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS). BUZZ HOLDINGS SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. BUZZ HOLDINGS MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY Van Eck Associates Corporation, OWNERS OF THE VanEck Social Sentiment ETF, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE BUZZ INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL BUZZ HOLDINGS BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN BUZZ HOLDINGS AND Van Eck Associates Corporation, OTHER THAN THE LICENSORS OF BUZZ HOLDINGS.

Effective August 18, 2016, BUZZ Indexes Inc. implemented changes to the BUZZ NextGen AI US Sentiment Leaders Index construction rules. The index constituent count was increased from 25 to 75 stocks and the maximum constituent weight was reduce from 15% to 3%. These changes may result in more a diversified exposure to index constituents than under the rules in effect prior to this date. Past performance is no guarantee of future results.

The S&P 500® Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Van Eck Associates Corporation. Copyright © 2021 S&P Dow Jones Indices LLC, a division of S&P Global, Inc., and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spdji.com. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.

An investment in the Fund may be subject to risks which include, among others, risks related to social media analytics, investing in equity securities, medium-capitalization companies, information technology, communication services, consumer discretionary, health care and industrials sectors, market, operational, high portfolio turnover, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified and concentration risks which may make these investments volatile in price or difficult to trade. Medium-capitalization companies may be subject to elevated risks.

Investing in companies based on social media analytics involves the potential risk of market manipulation because social media posts may be made with an intent to inflate, or otherwise manipulate, the public perception of a company stock or other investment. Although the Sentiment Leaders Index provider attempts to mitigate the potential risk of such manipulation by employing screens to identify posts which may be computer generated or deceptive and by employing market capitalization and trading volume criteria to remove companies which may be more likely targets for such manipulation, there is no guarantee that the Sentiment Leaders Index's model will successfully reduce such risk. Furthermore, text and sentiment analysis of social media postings may prove inaccurate in predicting a company's stock performance.

The information herein represents the opinion of the author(s), an employee of the advisor, but not necessarily those of VanEck. The securities/ financial instruments discussed in this material may not be appropriate for all investors. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

This material has been prepared for informational purposes only and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security/financial instrument, or to participate in any trading strategy.

Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data.

Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not generally backed or supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. The value of cryptocurrency may be derived from the continued willingness of market participants to exchange fiat currency for cryptocurrency, which may result in the potential for permanent and total loss of value of a particular cryptocurrency should the market for that cryptocurrency disappear. Cryptocurrencies are not covered by either FDIC or SIPC insurance.

Investing in cryptocurrencies comes with a number of risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. There is no assurance that a person who accepts a cryptocurrency as payment today will continue to do so in the future.

The features, functions, characteristics, operation, use and other properties of the specific cryptocurrency may be complex, technical, or difficult to understand or evaluate. The cryptocurrency may be vulnerable to attacks on the security, integrity or operation, including attacks using computing power sufficient to overwhelm the normal operation of the cryptocurrency’s blockchain or other underlying technology. Some cryptocurrency transactions will be deemed to be made when recorded on a public ledger, which is not necessarily the date or time that a transaction may have been initiated.

  • Investors must have the financial ability, sophistication and willingness to bear the risks of an investment and a potential total loss of their entire investment in cryptocurrency.
  • An investment in cryptocurrency is not suitable or desirable for all investors.
  • Cryptocurrency has limited operating history or performance.
  • Fees and expenses associated with a cryptocurrency investment may be substantial.

There may be risks posed by the lack of regulation for cryptocurrencies and any future regulatory developments could affect the viability and expansion of the use of cryptocurrencies. Investors should conduct extensive research before investing in cryptocurrencies. Past performance is not a guarantee of future results.

Information provided by Van Eck is not intended to be, nor should it be construed as financial, tax or legal advice. It is not a recommendation to buy or sell an interest in cryptocurrencies.

Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of a Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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