The frantic price action on stocks like GameStop Corp. led many retail brokers in recent days to impose a number of restrictions on commercial activity.
But there are still several ways investors can expose themselves to GameStop GME,
and other companies such as AMC Entertainment Holdings, AMC,
even through some analysts, they warn investors to take more than a little caution.
“People who own them or are thinking of buying them should be aware of the risk they take,” Todd Rosenbluth, head of ETF and mutual fund research at CFRA Research, told MarketWatch.
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“If they think GME is going to increase, then that’s their call, even though we have a stock sell recommendation. People think index ETFs are static, but of course they’re not,” he said.
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Rosenbluth’s comments serve as a call for investor awareness, including those they have. They occur amid a fight between individual investors and Wall Street hedge funds that has swept for days, causing effects across markets.
On Wednesday, GameStop closed at a record high of $ 347.51 after a 135% increase, while AMC shares quadrupled in price. The unusual price action makes people on and off Wall Street worry that a band of investors excited by conversations on chat forums like Reddit could wreak havoc on the market.
“Investors looking for diversification benefits from ETFs should be
keep in mind what there is to avoid taking undue risks, ”wrote Rosrabluth of CFRA.
For example, he noted that the popular SPDR S&P Retail Fund XRT,
which is often referred to by its XRT symbol, saw a big leap in GameStop as a proportion of its holdings, through its stratospheric rise, which accounted for 20% of the fund.
ETF.com
“The equally weighted XRT is now being dominated by GME,” Rosenbluth wrote in a note.
CFRA also says Wedbush ETFMG Video Games Tech ETF GAMR,
has a 14% position in GameStop.
Another thing to keep in mind, Rosenbluth said, is that when ETFs are being pursued for exposure to GameStop or other popular actions highlighted by online forums, it is that some ETFs are now underexposed to GameStop and others because of their sudden growth.
GameStop’s market value was $ 17 billion, in the latest check, after reaching the maximum market limit of about $ 24 billion on Wednesday, an impressive rise from its estimate of $ 1.3 billion. dollars to start in 2021.
Other ETFs with GameStop exposure include Direxion Daily Retail Bull 3x RETL Shares,
Invesco S&P SmallCap Value with Momentum ETF XSVM,
Invesco S&P SmallCap 600 RWJ Income ETF,
and Invesco S&P SmallCap Consumer Discretionary ETF PSCD,
ETF.com
For AMC Entertainment Holdings, there are 27 ETFs that maintain exposure, with IQ Chaikin ETF Small Cap CSML,
United States’ leading small-cap multifunctional ETF
Fundamental index of small American companies Schwab FNDA,
and Invesco RAFI Strategic US ETF IUSS,
which represents the main funds, according to ETF.com.
In Thursday’s trade, markets were mostly trying to provoke a considerable recession on Wednesday, inspired in part by concerns about the effects of wildlife trading AMC, GameStop and others.
The Dow Jones Industrial Average DJIA,
and the S&P 500 SPX index,
they went further and were going to recover much of the losses from the worst one-day slide in three months.