New York: A new ETF wants to tap into the fear of missing out among investors desperately chasing the everything rally.
A filing this week with the US Securities and Exchange Commission seeks to create the 'FOMO' exchange-traded fund, named for the famous acronym - Fear of Missing out - associated with countless bubbles and market manias.
The ETF from the Collaborative Investment Series Trust intends to invest in "securities that reflect current or emerging trends," according to a registration statement. The fund, advised by Tuttle Tactical Management, will select its holdings based on a "proprietary tactical model," the filing says.
Actively managed FOMO will target everything from stocks across both developed and emerging markets to SPACs, other ETFs, derivatives, volatility products and both leveraged and inverse funds. The filing notes that its tactical approach and frequent trading may result in a "high portfolio turnover rate".
No shortage of risks
"This ETF was pretty inevitable given the market we are in and features one of the longest 'risks' sections I've seen in a prospectus in a long time," said Eric Balchunas, ETF analyst for Bloomberg Intelligence. But "it may simply have too much going on to have a breakout."
If it comes to market, FOMO will be the latest in a series of ETFs appealing to the runaway risk appetite sweeping across assets. The VanEck Vectors Social Sentiment exchange-traded fund, which aims to buy the stocks most loved by investors online, had one of the strongest debuts on record last week after it was promoted by Barstool Sports Inc. founder Dave Portnoy.
If FOMO sounds a bit risky, Collaborative Investment is also planning something that might serve as a hedge. The same filing covers the Fat Tail Risk ETF, which will range across a similarly broad swathe of assets, but focuses on gold, volatility and Treasuries.