Jim Cramer Tracking ETFs Go All in on ‘Mad Money’

Jim Cramer Tracking ETFs Go All in on ‘Mad Money’

Tuttle Capital’s LJIM, SJIM both get a modest bump in first day of trading.

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Reviewed by: Sean Allocca
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Edited by: Sean Allocca

Whether you’re a believer or critic of CNBC’s Jim Cramer, you can now bet on one of the most controversial stock pickers in the industry. 

Two exchange-traded funds hit the market today that go long or short on the daily picks of the talked-about TV host. The SJIM (Inverse Cramer ETF) and the LJIM (Long Cramer ETF) base their holdings on the opinions shared on his hit show “Mad Money.” The proposed inverse fund is designed to perform the opposite of the return of the investments recommended on the show, while the long fund backs those picks.

SJIM gained about 0.5% while LJIM added 1.1%. Volume in the short-Cramer fund was 12 times that of the long fund. 

Launched by Riverside, Connecticut-based Tuttle Capital Management, the new funds generally consist of a few dozen equally weighted equity securities of any market capitalization, according to the funds' prospectus. The filing insists that “under normal circumstances” it will hold positions for no longer than a week and be based on recommendations from the show and on social media. Both funds carry an expense ratio of 1.2%. 

“With Cramer, there’s just no accountability,” CEO Matthew Tuttle told ETF.com. “Sure, the media is entertainment, but someone's got to be the voice of reason.” 

The latest celebrity-tracked ETF comes more than a year after the firm launched a similar investment that bets against Cathie Wood’s ARK Innovation ETF (ARKK). Assets peaked at about $631 million for Tuttle’s SARK fund and has outperformed ARKK since its debut, according to Bloomberg data.  

“When I did the short Cathie Wood [fund], it really got a lot of buzz, but people outside of our industry don’t really know who she is,” Tuttle said. “With Cramer, it’s everyone. Doctors, dentists, plumbers, even my stepdad doesn’t know Cathie Wood, but he’s like, ‘You sure you want to go up against Cramer?’ Yes, I do.”  

The fund will use an active management approach—and much discretion—when deciding what to go long and short based on what Cramer says, Tuttle said. One of the downsides is that he had to be glued to the TV screen or Cramer’s Twitter account every time “Mad Money” airs. Under normal circumstances, at least 80% is invested in the inverse of securities mentioned by Cramer, according to its website. 

 

 

The feud between Cramer and Tuttle has bubbled over into social media in recent months. “As always I welcome people betting against me,” Cramer tweeted when the fund was announced in October. “I have done this for 42 years … I welcome all comers.”  

CNBC, where Cramer has been hosting "Mad Money" since 2005, threw its support behind its long-term personality: “Jim’s mission has always been to encourage long-term investing and a balanced portfolio that includes index funds and individual stocks," a spokesperson told ETF.com.

"He regards 'Mad Money' as his classroom and believes educating those who want to pick individual stocks through insight and experience is the best way to help them take control of their finances,” the spokesperson said.

Tuttle recommends using his latest investment as approximately 10% of an overall portfolio and encourages investors to educate themselves on the risks and rewards that come with inverse and complex fund options.  

“It's a diversifier,” he said. “It will be unlike anything you have in your portfolio. Why 10%? It's just the number most people feel comfortable with when they diversify. Why Jim Cramer? Because it’s just radically different.” 

 

Contact Sean Allocca at [email protected] 

Sean Allocca is the former Editor-in-Chief of etf.com. Prior to etf.com, he was deputy managing editor at InvestmentNews, an editor for Financial Planning, and an editor for CFO Magazine. He holds a B.A. in writing from Loyola University, Maryland and an M.A. in communication from Fordham University.