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The stock trading app Robinhood (HOOD - Free Report) showed a sharp turnaround after a lackluster debut on the Nasdaq last week. This is especially true as the stock spiked as much as 80% at one point of trading on Aug 4 and close up at 50.4%. The massive surge has temporarily halted the trading of shares three times in the first half hour after the market opened.
With this, shares of HOOD are up more than 85% from the IPO price of $38.00, pushing up the market cap to $58.8 billion from $29.1 billion after its debut. This is more than that of Twitter , restaurant chain Chipotle Mexican Grill (CMG - Free Report) and asset manager T. Rowe Price (TROW - Free Report) . The surge came on the back of increased interest among retail traders. Robinhood is one of the most mentioned stocks on Reddit's WallStreetBets with nearly 2,000 mentions and Twitter with 61 comments over the past 24 hours.
Additionally, high profile investments like that of Cathie Wood also drove the share price higher. Further, the availability of call options added to the strength. Aug 4 marked the first day that investors can buy put and call options for Robinhood. Volume was also solid with 175.8 million shares exchanged hands (read: IPOs See Best Q2 in 2 Decades: ETFs to Ride the Boom).
Robinhood has exhibited incredible growth amid the retail trading frenzy in meme stocks like GameStop (GME - Free Report) and AMC Entertainment (AMC - Free Report) , driving unprecedented volume on this Millennial and Gen Z-powered trading platform. Robinhood — which offers equity, cryptocurrency and options trading, as well as cash management accounts — had 18 million clients as of March 2021, up 151% from 7.2 million in 2020.
ETFs in Focus
Given the meme stock craze, investors could easily tap this newly minted company with ETFs. A few have already fast filled the trading app and some will add Robinhood in their roster in the coming weeks. Any of these funds could be an excellent choice to tap the company’s growth.
This is an actively managed fund investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research. In total, the fund holds 47 securities in its basket with Robinhood accounting for 1.5% share. The fund charges 75 bps in annual fees and trades in an average daily volume of 7.6 million shares. It has AUM of $22.7 billion.
This ETF invests in a company having the theme of Fintech innovation. The Adviser defines Fintech innovation as the introduction of a technologically enabled new product or service that potentially changes the way the financial sector works, which ARK believes includes transaction innovations, blockchain technology, risk transformation, frictionless funding platforms, customer facing platforms and new intermediaries. The ETF holds 45 stocks with Robhinhood currently making up 1.3% of the assets. The fund charges 75 bps in annual fees and trades in an average daily volume of 1 million shares. It has managed assets worth $3.6 billion (read: Ride the Renewed Meme Stock Wave With This New ETF).
This is an actively managed fund focusing on companies that are expected to benefit from the shift in technology infrastructure to the cloud, enabling mobile, new and local services. The fund holds 47 stocks in its basket with HOOD taking 1.1% share in the basket. The ETF has amassed $5.9 billion in its asset base and charges 79 bps in annual fees. It trades in an average daily volume of 890,000 shares.
This fund provides exposure to the largest and most-liquid, newly listed companies by tracking the Renaissance IPO Index. New companies seek inclusion on a fast-entry basis on the fifth day of trading. The fund currently holds 73 stocks in its basket with technology being the top sector, accounting for 46.5% share, while consumer discretionary and healthcare round off the next two spots with double-digit allocations each. The fund has amassed $541.6 million in its asset base while it trades in a light volume of about 236,000 shares. The product charges 60 bps in annual fees (read: 2021 to be a Record Year for IPOs? ETFs in Focus).
First Trust US Equity Opportunities ETF (FPX - Free Report)
This ETF focuses on the largest, best-performing and most-liquid U.S. IPOs, and follows the IPOX-100 U.S. Index. New companies can find entry into the fund’s holding after trading for a minimum of 100 days. In total, the fund holds 100 securities in its basket and charges 57 bps in annual fees. The fund has accumulated $2.1 billion in AUM and witnesses volume of about 70,000 shares per day.
This product invests in companies on the leading edge of the emerging financial technology sector, which encompasses a range of innovations helping to transform established industries like insurance, investing, fundraising, and third-party lending through unique mobile and digital solutions. It follows the Indxx Global FinTech Thematic Index, holding 54 stocks. The fund has AUM of $1.3 billion and trades in a volume of 182,000 shares a day on average. It charges 68 bps in annual fees.
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Invest in Robinhood With These ETFs
The stock trading app Robinhood (HOOD - Free Report) showed a sharp turnaround after a lackluster debut on the Nasdaq last week. This is especially true as the stock spiked as much as 80% at one point of trading on Aug 4 and close up at 50.4%. The massive surge has temporarily halted the trading of shares three times in the first half hour after the market opened.
With this, shares of HOOD are up more than 85% from the IPO price of $38.00, pushing up the market cap to $58.8 billion from $29.1 billion after its debut. This is more than that of Twitter , restaurant chain Chipotle Mexican Grill (CMG - Free Report) and asset manager T. Rowe Price (TROW - Free Report) . The surge came on the back of increased interest among retail traders. Robinhood is one of the most mentioned stocks on Reddit's WallStreetBets with nearly 2,000 mentions and Twitter with 61 comments over the past 24 hours.
Additionally, high profile investments like that of Cathie Wood also drove the share price higher. Further, the availability of call options added to the strength. Aug 4 marked the first day that investors can buy put and call options for Robinhood. Volume was also solid with 175.8 million shares exchanged hands (read: IPOs See Best Q2 in 2 Decades: ETFs to Ride the Boom).
Robinhood has exhibited incredible growth amid the retail trading frenzy in meme stocks like GameStop (GME - Free Report) and AMC Entertainment (AMC - Free Report) , driving unprecedented volume on this Millennial and Gen Z-powered trading platform. Robinhood — which offers equity, cryptocurrency and options trading, as well as cash management accounts — had 18 million clients as of March 2021, up 151% from 7.2 million in 2020.
ETFs in Focus
Given the meme stock craze, investors could easily tap this newly minted company with ETFs. A few have already fast filled the trading app and some will add Robinhood in their roster in the coming weeks. Any of these funds could be an excellent choice to tap the company’s growth.
Ark Innovation ETF (ARKK - Free Report)
This is an actively managed fund investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research. In total, the fund holds 47 securities in its basket with Robinhood accounting for 1.5% share. The fund charges 75 bps in annual fees and trades in an average daily volume of 7.6 million shares. It has AUM of $22.7 billion.
ARK Fintech Innovation ETF (ARKF - Free Report)
This ETF invests in a company having the theme of Fintech innovation. The Adviser defines Fintech innovation as the introduction of a technologically enabled new product or service that potentially changes the way the financial sector works, which ARK believes includes transaction innovations, blockchain technology, risk transformation, frictionless funding platforms, customer facing platforms and new intermediaries. The ETF holds 45 stocks with Robhinhood currently making up 1.3% of the assets. The fund charges 75 bps in annual fees and trades in an average daily volume of 1 million shares. It has managed assets worth $3.6 billion (read: Ride the Renewed Meme Stock Wave With This New ETF).
ARK Next Generation Internet ETF (ARKW - Free Report)
This is an actively managed fund focusing on companies that are expected to benefit from the shift in technology infrastructure to the cloud, enabling mobile, new and local services. The fund holds 47 stocks in its basket with HOOD taking 1.1% share in the basket. The ETF has amassed $5.9 billion in its asset base and charges 79 bps in annual fees. It trades in an average daily volume of 890,000 shares.
Renaissance IPO ETF (IPO - Free Report)
This fund provides exposure to the largest and most-liquid, newly listed companies by tracking the Renaissance IPO Index. New companies seek inclusion on a fast-entry basis on the fifth day of trading. The fund currently holds 73 stocks in its basket with technology being the top sector, accounting for 46.5% share, while consumer discretionary and healthcare round off the next two spots with double-digit allocations each. The fund has amassed $541.6 million in its asset base while it trades in a light volume of about 236,000 shares. The product charges 60 bps in annual fees (read: 2021 to be a Record Year for IPOs? ETFs in Focus).
First Trust US Equity Opportunities ETF (FPX - Free Report)
This ETF focuses on the largest, best-performing and most-liquid U.S. IPOs, and follows the IPOX-100 U.S. Index. New companies can find entry into the fund’s holding after trading for a minimum of 100 days. In total, the fund holds 100 securities in its basket and charges 57 bps in annual fees. The fund has accumulated $2.1 billion in AUM and witnesses volume of about 70,000 shares per day.
Global X FinTech ETF (FINX - Free Report)
This product invests in companies on the leading edge of the emerging financial technology sector, which encompasses a range of innovations helping to transform established industries like insurance, investing, fundraising, and third-party lending through unique mobile and digital solutions. It follows the Indxx Global FinTech Thematic Index, holding 54 stocks. The fund has AUM of $1.3 billion and trades in a volume of 182,000 shares a day on average. It charges 68 bps in annual fees.