If you haven’t heard, ICE has a new futures contract out this week. It’s an index of the FANG stocks plus 5 more they think people will want exposure to.
The guys who ok’d this at ICE basically think individual investors are so brainless, they can’t even put together a basket of 5-6 stocks to trade in and out of.
These guys will tell you they’re doing it for traders, but that’s complete B.S. They included Twitter and Tesla because they’re selling a product. Those two companies are NOTHING like the other 8. They should’ve just gone YOLO and added Snapchat. Honestly, what’s the difference?
Style wise this makes no sense. If you’re wanting to get long tech for a trade, are you really going to come to this thing with Tesla, Twitter and Bidu? Who says ‘I want to get long the best companies in the world plus some uncorrelated trash’ for a trade?
If you’re a hedge fund manager that wants to look like a hero shorting Apple, Google, Netflix, maybe this fund is for you. Other than that, what’s the purpose here?
This is close to a good idea, but it’s just another line in the market history books.