eToro launches SocialSentiment portfolio as meme stocks proved power of the herd
“The events over the past several years relating to the meme-stock rallies are evidence of how the herd can change direction, and where these changes happen, which is largely in social networks and forums.”
eToro has launched SocialSentiment, a portfolio offering exposure to US companies with solid ESG performance and high levels of positive social chatter.
SocialSentiment was developed by the retail brokerage firm in partnership with Sentifi, an alternative data provider which ranked in the AIFinTech100 list for its pioneering Artificial Intelligence (AI) technology.
Sentifi analyses over 50,000 stocks, currencies, commodities, indices, passive and active funds, and then pairs these metrics with social sentiment (sentScore) and ESG scores in order to shape the portfolio.
Sentiment based on 500 millions tweets, 2 million news articles, forums, blogs
Sentiment towards an asset is determined by allocating a sentScore, established by analysing over 500 millions tweets, 2 million news articles, forums and blogs.The result is a selection of US stocks with high ESG credentials and positive social chatter.
The allocation is rebalanced monthly and consists of the top 10 S&P 500 stocks that meet the ESG and social sentiment criteria, ranked by their lowest risk over attention-weighted sentiment score (AWSS).
Dani Brinker, Head of Investment Portfolios at eToro said: “eToro pioneered social investing and showed how the power of social can empower people around the world to build their wealth and take control of their finances. With this portfolio, we aim to offer retail investors exposure to stocks that are being discussed in a positive light on social and digital channels, adding an extra layer of insights. We are looking forward to partnering with the Sentifi team, and working together to harness the power of social networks.”
Marina Goche, CEO at Sentifi said: “When it comes to investing, information is power and the more knowledge retail investors have, the more informed decisions they can make. The events over the past several years relating to the meme-stock rallies are evidence of how the herd can change direction, and where these changes happen, which is largely in social networks and forums. Social networks, news, blogs and forums are also a valuable source of changing risk for asset classes and offer dynamic views on ESG performance appreciation and degradation for companies globally – essential for constructing portfolios that outperform a benchmark. Sentifi is delighted to partner with eToro to offer eToro’s Social Sentiment portfolio.”
Part of eToro’s Smart Portfolios for a long-term investment with no management fees
The newly launched SocialSentiment portfolio is part of eToro’s range of Smart Portfolios: a product range that offers investors exposure to various market themes.
eToro’s Smart Portfolios are long-term investment solutions that offer diversified exposure with no management fees. Each portfolio bundles together several assets under a defined methodology and employs a passive investment approach with initial investment starting from USD$500.
Under Smart Portfolios, investors can access tools and charts to track the portfolio’s performance, while eToro’s social feed will keep them up-to-date on developments in the sector.
eToro’s SocialSentiment portfolio developed in partnership with Sentifi is currently not available to US users.