New 'Animal Spirits' ETF Offers 2x Exposure to Major Stocks

If you believe human emotions drive investment gains and losses, VistaShares may have a new exchange-traded fund for you.

On Wednesday, the asset manager launched the VistaShares Animal Spirits 2x Daily Strategy ETF (WILD), which will offer 2x daily exposure to five of the most popular stocks based on their buying momentum and investor sentiment. 

The Methodology Behind WILD

Adam Patti, CEO of VistaShares, told etf.com that he had been intrigued by single-stock leveraged products for over a year before wanting to provide a better option. These types of funds, which trade a single equity and multiply performance with derivatives, have surged in popularity of late despite their risk and volatility.

“Whether you like them or not, investors have a clear use of them to express their views of the market or specific stocks,” Patti said.

After speaking to institutions and institutional trading desks about offering high-beta exposure—and how those firms were creating methodologies to package several names together as opposed to taking a bet on one name—VistaShares came up with its own methodology. This involves looking at the universe of the roughly 30 underlying names that have single-stock leveraged ETFs associated with them, then choosing the ones with the most assets deployed against them and the most assets flowing into them.

The portfolio composition is adjusted monthly to reflect any changing sentiment around the popular stocks. The five names are equally weighted.

“We’re trying to harness investor sentiment and momentum in the marketplace, and go where the money is going,” Patti said. “If you believe that these wildly successful trading stocks are going up, this is a great way to get that exposure."

He added that the fund also lessens the risk of being exposed to a single stock. 

The VistaShares ETF Lineup

The VistaShares suite of ETFs also includes the VistaShares Target 15 Berkshire Select Income ETF (OMAH), an active ETF allowing market participants to invest like Warren Buffett and get monthly income potential, and the VistaShares Target 15 USA Quality Income ETF (QUSA), which combines factor-based equity investing with an options overlay designed to generate high monthly income. 

Just last week, Tidal Trust filed with the Securities and Exchange Commission for VistaShares to offer seven ETFs with exposure to the top picks of elite investors such as Michael Burry of Scion Asset Management and Bill Ackman of Pershing Square Holdings.

“What we’re trying to do here at VistaShares is create products that don’t exist,” Patti said when asked about WILD. That includes leveraging “institutional-type portfolio construction to fill white space in the market and hopefully provide products that have strong use cases.”