BUZZ Indexes Enables the First ETF Built Using AI

The application of artificial intelligence (AI) and big data to the investing process is an exciting one, and up until now this application has been limited to only the most sophisticated institutional investors. One of our readers recently informed us about a company called BUZZ Indexes that takes all the big data being generated by social media, interprets that data using AI, and then uses it as a momentum factor to determine which stocks are most likely to outperform their peers. While we generally look at social media as a time wasting black hole as opposed to a legitimate technological advancement, we’re genuinely interested in learning more about this new investment product that allows any retail investor to get in the game.

The way an ETF works is that you have an index provider who tracks a basket of stocks and then an ETF provider who then tracks that index and turns it into a tradable investment vehicle. In this case, a Canadian company called BUZZ Indexes has built an index called the “BUZZ Social Media Insights Index” which identified the 75 most bullish stocks based on social media “big data”. This index powers the Sprott BUZZ Social Media Insights ETF (BUZ).

Here’s how the index is produced. Firstly, BUZZ Indexes needs to identify their big data sets. These are not just traditional social media outlets like Twitter and Facebook but also websites like Seeking Alpha which has a treasure trove of useful comments, in fact, the comments are o