In this article, we discuss the 10 ETFs popular on Robinhood.
Traditional stock trading firms and financial advisory services have lost a huge amount of business to online trading applications in recent years. The convenience factor of these online brokerages, alongside zero commissions or fees, have also made them hugely popular among a new generation of investors eager to get started at the stock market. Other benefits of using these online firms include robotic advisors, artificial intelligence-powered insights, and seamless networking. Robinhood Markets, Inc. (NASDAQ:HOOD) is one such trading app.
Robinhood Markets, Inc. (NASDAQ:HOOD) debuted at the market in the summer of 2021, raising close to $2 billion at the initial offering and was valued at around $32 billion at the end of the first day of trading. In 2021, the firm had more than 22 million active users. Even though the stock has lost value in the past few weeks as interest rates rise and push investors away from growth offerings, the developing economic conditions have also served to increase trades of exchange-traded funds (ETFs) on the online app.
ETFs offer investors of all types certain advantages that include diversification, low fees, and trading flexibility. In an inflationary market, these advantages assume increased importance. The ETFs popular on the online stock trading application mirror the stocks popular on it. Some of the top holdings of the ETFs popular on Robinhood Markets, Inc. (NASDAQ:HOOD) presently include NVIDIA Corporation (NASDAQ:NVDA), PayPal Holdings, Inc. (NASDAQ:PYPL), and Snap Inc. (NYSE:SNAP), among others discussed in detail below.
ETFs Rising in Popularity Amid Market Volatility
There is tangible evidence supporting the claims that a rising number of investors now prefer ETFs over individual equities as the market becomes more volatile. In 2021, per data by financial services firm Morningstar, nearly $100 billion flowed into equity-based ETFs, up from $70 billion in the previous year. In early 2022, there were more than 490 equity ETFs that held $806 billion in assets. In 2016, these numbers had been 370 and $346 billion. According to Jay Jacobs, the head of research and strategy at fund management firm Global X ETFs, the pandemic has forced people to look for targeted exposures to the market, even within sectors.
A new survey by investment banking firm Brown Brothers Harriman reveals that ETFs crossed a record $10 trillion in assets under management in 2021 and collected inflows of $1.2 trillion. US-based investors are leading this new bull market for the ETF industry. Nearly 84% of the institutional investors, fund managers, and financial advisors surveyed by Brown are looking to increase their ETF allocations in 2022, an increase of over 10% from the previous year. There is also a tilt towards actively-managed ETFs.
The survey further reveals that over 85% of US-based investors are looking to increase fixed income ETF allocations in the next year, an increase of nearly 20% compared to 2021. Some of the dominant themes expected to shape the industry moving forward include entertainment, aerospace, online retail, and energy production. Even as ETFs see record inflows, questions about the expense ratios of these ETFs and the management fees they charge remain a topic of intense debate.
Our Methodology
The ETFs listed below were picked based on the hype around them on stocks trading app Robinhood Markets, Inc. (NASDAQ:HOOD). The aim of the article is to provide readers with a basic rundown of some of the top Robinhood ETFs in the US. All the ETFs listed below trade on exchanges in the United States.
Source:unsplash
ETFs Popular on Robinhood
10. Vanguard S&P 500 ETF (NYSE:VOO)
Vanguard S&P 500 ETF (NYSE:VOO) is a fund that tracks the performance of the S&P 500 Index. The index comprises 500 of the largest firms in the US based on market capitalization. The fund holds each stock in almost the same proportion as its corresponding weightage on the index.
One of the biggest holdings of Vanguard S&P 500 ETF (NYSE:VOO) is Apple Inc. (NASDAQ:AAPL), a diversified technology company headquartered in California. At the end of the fourth quarter of 2021, 134 hedge funds in the database of Insider Monkey held stakes worth $186 billion in Apple Inc. (NASDAQ:AAPL), up from 120 in the previous quarter worth $146 billion.
Just like NVIDIA Corporation (NASDAQ:NVDA), PayPal Holdings, Inc. (NASDAQ:PYPL), and Snap Inc. (NYSE:SNAP), Apple Inc. (NASDAQ:AAPL) is one of the stocks popular on Robinhood Markets, Inc. (NASDAQ:HOOD).
In its Q4 2021 investor letter, Berkshire Hathaway highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:
“Apple Inc. (NASDAQ:AAPL) – our runner-up Giant as measured by its yearend market value – is a different sort of holding. Here, our ownership is a mere 5.55%, up from 5.39% a year earlier. That increase sounds like small potatoes. But consider that each 0.1% of Apple’s 2021 earnings amounted to $100 million. We spent no Berkshire funds to gain our accretion. Apple’s repurchases did the job. It’s important to understand that only dividends from Apple are counted in the GAAP earnings Berkshire reports – and last year, Apple paid us $785 million of those. Yet our “share” of Apple’s earnings amounted to a staggering $5.6 billion. Much of what the company retained was used to repurchase Apple Inc. (NASDAQ:AAPL) shares, an act we applaud. Tim Cook, Apple’s brilliant CEO, quite properly regards users of Apple Inc. (NASDAQ:AAPL) products as his first love, but all of his other constituencies benefit from Tim’s managerial touch as well.”
9. SPDR S&P 500 ETF Trust (NYSE:SPY)
SPDR S&P 500 ETF Trust (NYSE:SPY) is an exchange traded fund that tracks the investment returns of the S&P 500 Index which comprises a group of large-cap companies that trade on exchanges in the US. The weight of each stock in the fund corresponds to the weight of each stock in the underlying index.
A premier holding of SPDR S&P 500 ETF Trust (NYSE:SPY) is Microsoft Corporation (NASDAQ:MSFT), a Washington-based tech giant. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Microsoft Corporation (NASDAQ:MSFT) with 26 million shares worth more than $9 billion.
In its Q4 2021 investor letter, ClearBridge Investments, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“Despite these mixed emerging growth results, the ClearBridge Global Growth Strategy outperformed the benchmark due to resilience among our secular and structural growth holdings. The bulk of these contributions came from U.S. mega-cap growth stocks Apple and Microsoft Corporation (NASDAQ:MSFT) which continued to uniquely act both offensively and defensively as they have through most of the pandemic.”
8. ARK Innovation ETF (NYSE:ARKK)
ARK Innovation ETF (NYSE:ARKK) is an exchange traded fund that invests at least 65% of net assets in securities relevant to the disruptive innovation theme of the fund. The fund can invest in both domestic and foreign securities. The fund invests in developed as well as emerging markets. It is a non-diversified fund.
A key holding of the ARK Innovation ETF (NYSE:ARKK) is Tesla, Inc. (NASDAQ:TSLA), an electric vehicle and clean energy firm led by eccentric billionaire Elon Musk. At the end of the fourth quarter of 2021, 91 hedge funds in the database of Insider Monkey held stakes worth $12.9 billion in Tesla, Inc. (NASDAQ:TSLA), up from 60 in the previous quarter worth $10.6 billion.
In its Q4 2021 investor letter, ClearBridge Investments, an investment management firm, highlighted a few stocks and Tesla, Inc. (NASDAQ:TSLA) was one of them. Here is what the fund said:
“Within the growth universe we target, emerging growth stocks – the category with the highest revenue growth rates – significantly underperformed the overall growth categories in 2021 after leading performance in 2020. The pull-through effect on digitization, online access across industries, and spending to modernize outdated corporate infrastructures accelerated trends in a highly compressed time frame. Much of that trend slackened in 2021 and shares of these companies, while showing good top-line growth, saw slowing appreciation from the blistering pace in the prior year. With that moderating growth, multiples decelerated from 2020 highs. Bucking the headwinds among our emerging growth names was Tesla, Inc. (NASDAQ:TSLA) which saw continued sales momentum from their leadership positions in the key growth areas of electric vehicles.”
7. Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (NYSE:GUSH)
Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (NYSE:GUSH) is an exchange traded fund that tracks the investment returns of a group of stocks from the oil and gas exploration and production sector. The fund invests at least 80% of net assets in these securities.
Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (NYSE:GUSH) holds a large stake in Devon Energy Corporation (NYSE:DVN), an independent energy firm. Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm GQG Partners is a leading shareholder in Devon Energy Corporation (NYSE:DVN) with 14.5 million shares worth more than $638 million.
In addition to NVIDIA Corporation (NASDAQ:NVDA), PayPal Holdings, Inc. (NASDAQ:PYPL), and Snap Inc. (NYSE:SNAP), Devon Energy Corporation (NYSE:DVN) is one of the stocks that retail traders on Robinhood Markets, Inc. (NASDAQ:HOOD) are buying.
In its Q4 2020 investor letter, GoodHaven Capital Management, an asset management firm, highlighted a few stocks and Devon Energy Corporation (NYSE:DVN) was one of them. Here is what the fund said:
“After a rough start to the year our two biggest energy holdings – WPX Energy rebounded materially in the last six months though energy was still our biggest detractor for the year. I’ve previously written about deciding earlier this year to direct new capital towards better businesses versus adding more to the energy sector, but given the material optionality at WPX, we opted to maintain a material exposure. Recently WPX announced an all stock merger with a larger competitor – Devon Energy Corporation (NYSE:DVN) – which will leave the new company with plenty of cash flow at lower oil prices, less leverage, and material upside to higher commodity prices.”
6. iShares Silver Trust (NYSE:SLV)
iShares Silver Trust (NYSE:SLV) is an exchange traded fund that tracks the price performance of the underlying holdings in the LMBA Silver Price. The fund has over $13.2 billion in assets under management and a YTD daily total return of 6.82%.
Since the iShares Silver Trust (NYSE:SLV) was initiated in 2006, it has generated, on average, an annual total return of around 4.5%. The holdings represent silver and come in handy as a hedge against inflation. JPMorgan is the custodian institution of the fund. The fund does not buy or sell silver to profit from the market price swings but does sell to cover operating expenses from time to time.
5. ARK Fintech Innovation ETF (NYSE:ARKF)
ARK Fintech Innovation ETF (NYSE:ARKF) is an exchange traded fund that invests at least 80% of net assets in domestic or foreign securities that fall under the fintech innovation theme of the fund. It is an actively-managed, non-diversified fund.
A premier holding of the ARK Fintech Innovation ETF (NYSE:ARKF) is Block, Inc. (NYSE:SQ), a California-based payments firm. At the end of the fourth quarter of 2021, 96 hedge funds in the database of Insider Monkey held stakes worth $5.9 billion in Block, Inc. (NYSE:SQ), compared to 98 in the preceding quarter worth $8.8 billion.
In its Q4 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Block, Inc. (NYSE:SQ) was one of them. Here is what the fund said:
“High exposure to lagging E-commerce companies and underperformance of Block, Inc. (NYSE:SQ) in the Payments theme were the only material detractors from relative performance. E-commerce stocks lagged as a return to in-store shopping caused online shopping growth to moderate. Block, Inc. (NYSE:SQ) was the second largest detractor due to slowing growth in the Cash App segment and greater skepticism about the growth prospects for the pending acquisition of Afterpay.”
4. Renaissance IPO ETF (NYSE:IPO)
Renaissance IPO ETF (NYSE:IPO) is an exchange traded fund that invests at least 80% of net assets in an index that tracks companies that recently completed an initial public offering (IPO). The fund only invests in firms trading on exchanges in the United States.
Renaissance IPO ETF (NYSE:IPO) has invested heavily in Coinbase Global, Inc. (NASDAQ:COIN), a fintech firm catering to the crypto-economy that went public last year. Among the hedge funds being tracked by Insider Monkey, New York-based firm ARK Investment Management is a leading shareholder in Coinbase Global, Inc. (NASDAQ:COIN) with 5.4 million shares worth more than $1.3 billion.
In its Q4 2021 investor letter, Longleaf Partners Fund, an asset management firm, highlighted a few stocks and Coinbase Global, Inc. (NASDAQ:COIN) was one of them. Here is what the fund said:
“We also have seen plenty of IPO/SPAC craziness showing both that private players need public markets more than they admit and that there is more volatility embedded in these newer companies than a private quarterly mark might admit. As for how efficient both the private and public markets are, we would encourage you to really delve into some of those multi-hundred-page S1s for many of the newest public companies to see the huge gap between the last valuation at which the company was funded and/or granted shares to its executives and the often much higher price at which the company went public – Coinbase Global, Inc. (NASDAQ:COIN) is a prime example.”
3. First Trust US Equity Opportunities ETF (NYSE:FPX)
First Trust US Equity Opportunities ETF (NYSE:FPX) is an exchange traded fund that invests at least 90% of net assets in an index that tracks 100 of the largest and typically most liquid initial public offerings. The fund is non-diversified.
One of the biggest holdings of the First Trust US Equity Opportunities ETF (NYSE:FPX) is Snap Inc. (NYSE:SNAP), a California-based camera company. Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Lone Pine Capital is a leading shareholder in Snap Inc. (NYSE:SNAP) with 33 million shares worth more than $1.5 billion.
In its Q4 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Snap Inc. (NYSE:SNAP) was one of them. Here is what the fund said:
“Snap Inc. (NYSE:SNAP) is the leading social network among teens and young adults in North America and a growing number of overseas markets, including Western Europe and India. Shares fell this quarter on a greater-thananticipated impact from Apple’s new privacy changes for iOS mobile devices. These changes made it more difficult for Snapchat to measure the effectiveness of ads shown on its platform. We believe this is a near-term, industry-wide issue for which Snap is already developing a solution. Longer term, we continue to view Snap Inc. (NYSE:SNAP) favorably as the company sustains its rapid pace of product innovation and expands its premium partnerships with advertisers.”
2. Global X FinTech ETF (NASDAQ:FINX)
Global X FinTech ETF (NASDAQ:FINX) is an exchange traded fund that invests at least 80% of total assets in securities on an index that tracks the performance of firms that provide financial technology and related services in developed markets.
A flagship holding of the Global X FinTech ETF (NASDAQ:FINX) is PayPal Holdings, Inc. (NASDAQ:PYPL), a business that provides digital payment solutions. At the end of the fourth quarter of 2021, 110 hedge funds in the database of Insider Monkey held stakes worth $9.9 billion in PayPal Holdings, Inc. (NASDAQ:PYPL), compared to 123 in the preceding quarter worth $12.8 billion.
In its Q4 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and PayPal Holdings, Inc. (NASDAQ:PYPL) was one of them. Here is what the fund said:
“PayPal Holdings, Inc. (NASDAQ:PYPL) enables digital payments for consumers and merchants worldwide. Shares fell after the company reported lower-than-expected quarterly results, and reduced guidance due to the faster roll-off of eBay’s processing business and slowing e-commerce growth as stores reopen. Shares were also pressured by rumors of a potential acquisition of Pinterest, as well as broader weakness across payment stocks during the quarter. We believe the share price decline is overdone given quarterly revenue growth of 25% (excluding eBay), and PayPal’s unmatched global scale with 416 million active accounts. We continue to own the stock because we believe PayPal Holdings, Inc. (NASDAQ:PYPL) is a prime beneficiary of the secular growth of e-commerce and digital financial services.”
1. Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV)
Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV) is a non-diversified exchange traded fund that tracks the investment returns of an index that comprises companies working in the electric vehicles and autonomous driving sector.
One of the top holdings of the firm is NVIDIA Corporation (NASDAQ:NVDA), the microchip maker from California. At the end of the fourth quarter of 2021, 110 hedge funds in the database of Insider Monkey held stakes worth $10.4 billion in NVIDIA Corporation (NASDAQ:NVDA), up from 83 in the previous quarter worth $10 billion.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“During the fourth quarter, the ClearBridge Global Growth Strategy outperformed its MSCI ACWI benchmark. The Strategy delivered gains across eight of the nine sectors in which it was invested (out of 11 total), with the information technology (IT) and industrials sectors the primary contributors. The communication services sector was the sole detractor. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022. Bucking the headwinds among our emerging growth names was NVIDIA Corporation (NASDAQ:NVDA), which saw continued sales momentum from their leadership positions in the key growth areas of graphics processing units for gaming and data centers.”
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Disclosure. None. 10 ETFs Popular on Robinhood is originally published on Insider Monkey.
