MEME ETF Rises From the Grave
The meme stock category isn’t about stonks and tendies anymore, and the new iteration focuses on broader retail sentiment.
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Just in time for Halloween, we have a zombie fund.
Roundhill Investments last week resurrected its Meme Stock ETF (MEME), and something about it is a little … different. The former iteration was a COVID-era exchange-traded fund that, like others of its time, did not see as much promise in a post-pandemic world. The ETF had previously focused on meme stocks like GameStop and AMC Entertainment Holdings that were powerfully inflated by #wallstreetbets Subreddit participants and others.
“A few years ago, meme stocks were largely defined by short squeezes and social media-fueled surges. Now, the term captures a broader and more enduring market dynamic: the influence of retail sentiment as a legitimate force shaping liquidity, volatility and narrative momentum across the market,” Roundhill CEO Dave Mazza said. “In that sense, MEME isn’t about chasing yesterday’s headlines. It’s about reflecting how investor attention drives markets today.”
It’s Alive!
A notable difference between the dead and undead versions of the ETF is that the old one tracked an index, whereas the reanimated one is actively managed. That’s reflected in the fee, which is 0.69%. As noted in the fund’s prospectus, meme stocks are highly speculative and volatile. The ETF can select meme stocks based on social media momentum (likes, comments, etc.), which does not necessarily reflect a company’s fundamentals. One fund that uses AI, the VanEck Social Sentiment ETF (BUZZ), has returned 52% year to date.
The top holdings of the new version of MEME include:
- Rigettia Computing (12%)
- QuantumScape Corp (6%)
- Bloom Energy (6%)
Don’t Try This at Home: Just as one Covid-era ETF has arisen, another is passing. Direxion recently disclosed that its Work From Home ETF (WFH), along with the Daily Electric and Autonomous Vehicles Bull 2X Shares (EVAV) and Daily MSCI Emerging Markets Ex China Bull 2X Shares (XXCH) ETFs, will close Oct. 23. The Work From Home ETF had limited investor interest, chief product officer Mo Sparks said in a statement provided by a spokesperson. “Since the height of the pandemic, many of the trends that initially fueled enthusiasm for remote work have normalized, and investor focus has shifted,” he said. “We see this as part of the natural evolution of thematic investing.”
