Roundhill MEME ETF (MEME) hits the market

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The Roundhill MEME ETF (MEME) is expected to start trading on December 8, 2021. This exchange-traded fund (ETF) is designed to track the Solactive Roundhill Meme Index, which contains 25 stocks that are likely to generate interest on sell days retail assets. traders. The index applies screens related to social media activity and short interest.

So-called memes stocks became a hot investment theme for day traders in early 2021, leading to short cuts to stocks like GameStop Corp. (GME) and AMC Entertainment Holdings, Inc. (AMC). However, the degree of speculation in stocks like these has waned in the meantime, pushing the Solactive Roundhill Meme Index down 14% in the week ending December 3, 2021.

Key points to remember

  • The Roundhill SAME ETF (MEME) will consist of 25 so-called same stocks.
  • These stocks have high mentions on social media.
  • Another selection criterion will be high short interest.

The concept

Will Hershey, CEO of Roundhill Investments, said this of the so called memes equity day trading: “I think this is due to too much liquidity in the system, but it’s hard to say it’s going to go away. It is not an action. , this is not AMC or GameStop. It is this whole concept of retail investors – but it can be more than that – behind a single concept or action for no other reason than what they are. “

Selection criteria

According to the registration statement filed with the United States Securities and Exchange Commission (SEC) on August 26, 2021, here are the detailed selection criteria for inclusion of stocks in the Solactive Roundhill Meme Index:

“The initial index universe will be composed of all issuers included in the Solactive GBS United States All Cap index and who meet the requirements for minimum market capitalization and average daily trading volume. Each issuer in the universe is then assigned a “social media activity score,” which is based on the number of mentions of a business name or ticker over a 14-day period on media platforms. specific social networks defined in the methodology of the index, the main objective of which is to facilitate discussion on the performance of the financial industry in general and / or the stock or options markets in particular. ”

“On each screening day (as defined below), the top 50 issuers by social media activity score are then ranked based on their short-term interest, which is assigned by an independent third-party data provider. . The resulting first 25 issuers by short-term interest will be selected as constituents of the index and also weighted therein. ”

“The components of the Index will be rebalanced every two weeks, with selections made every other Friday (“ Selection Day ”). If a Selection Day does not fall on a day when the New York Stock Exchange is open (a “Business Day”), then that Selection Day will be postponed to the next Business Day. Any resulting index adjustment will be made on the second business day after the selection day. “


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