There is an indicator that some use for investing that is based on “buzz.” Traders, especially day-traders or short-term traders watch to see which companies might benefit from the news and opinions of others. One ETF that said it worked to find these was BUZ – BUZZ US Sentiment Leaders ETF.
Do you see a problem with this approach? I do. The problem is that rumors and sentiments can change in a heartbeat. Some investments are like Eddie Haskell. Eddie was a fictional character on the “Leave It To Beaver” television series. Eddie looked sweet and talked a good game, but he was often a trouble-maker. He was a flatterer, insincere, shallow and sneaky. It was words over substance.
What about BUZ? Is it a good one? The expense ratio was 0.75% which ate up the meager dividend yield of 0.53%. The turnover ratio was an appalling 353%. The top ten investments included at least four companies I view as highly speculative: GE, AMD, CGC and SQ. However, the fund did have good companies like MSFT, BA, GOOGL and V.
There is one other problem with something like BUZ. BUZ ceased trading on 03/01/19. I’m not certain what investors received when that happened.
My recommendation? Buy shares of good companies or solid ETFs and don’t waste your time or risk your investment dollars in sentiment ETFs.