Meme ETFs that target renewable energy stocks, housing, infrastructure, and robotics have also benefited from the animal spirits supporting meme ETFs. These sectors have had high inflows, which for most followed significant outflows following the top in equity markets late last year.
The popular Innovation ETF (ARKK) from Ark Invest, which acts as a gauge of investor interest in a broad range of exciting technology businesses that frequently trade at speculative values, has recovered 14.8% since July 26, recouping a tiny portion of its 65.0% loss since November.
The funds have lived up to their reputation as sentiment-driven, high-beta investments favored by the Reddit WallStreetBets community. They all underperformed the S&P 500’s decline on the way down, but have outpaced it since late July, rising 7.4% faster.
Riding the trend are the Invesco Solar ETF (TAN), the iShares Global Clean Energy ETF (ICLN), and the First Trust Nasdaq Clean Energy Index Fund (QCLN) – which have increased by 21%, 20%, and 22%, respectively, since July 26 – as well as other renewable energy ETFs.
Kenneth Lamont, senior fund analyst for passive strategies at Morningstar, told the Times: “These funds tend to be high beta, so it shouldn’t be too surprising that as the US equity market has ticked up again, that these funds too have recovered some ground over recent weeks.”
