Robinhood has become a popular tool for judging the sentiment of the individual retail investor. And for 2020, they haven't done too poorly. They bought low on both oil and airline stocks and managed to catch a break on a few beaten down retail names, such as Hertz, as well.
While Robinhood account holders as a whole have buying doing a lot of buying this year, they have been cooling off on a few names. Several of these ETFs were being bought low when sentiment was at its lowest. Now, some investors appear to be closing out positions as the easy gains have already been had.
Here are 4 ETFs that Robinhood accounts have been removing from their portfolios.
United States Oil Fund (USO)
This was one of the most active funds on Robinhood earlier this year when oil prices were cratering. As USO's price plummeted, investors started to snap up shares waiting for a rebound. They got it and USO was one of the most popular trades on the platform.
Now that oil prices have stabilized around the $40 mark, much of the big gain potential has disappeared. With the coronavirus starting to spread rapidly again, oil might even be poised for a big move down again. USO is still one of the 50 most owned securities on the platform, but it's come down significantly from its 2020 peak.
ProShares Ultra Bloomberg Crude Oil Fund (UCO)
The story here is almost identical to that of USO. UCO, essentially the leveraged version of USO, saw similar buying interest during the April oil market crash. It's still down significantly on the year, but those account holders who were able to buy in near the bottom have seen big returns on their investment.
But like USO, much of the big gains may be in the past instead of the future. UCO is still being held in tens of thousands of Robinhood accounts, but the total number has been coming down.
Direxion Daily Junior Gold Miners Bull 2x Shares ETF (JNUG)
Junior gold miners are risky in and of themselves, so you can imagine what the leveraged version of this sector has done. This group is actually up 17% on the year, but JNUG is still down more than 80% year-to-date. Hard to believe? Leveraged products, which usually invest in derivatives contracts instead of stocks or hard assets, can behave erratically, especially in volatile markets.
Robinhood shareholders built up positions in JNUG earlier this year hoping to catch a bounce similar to the one they saw in oil. Again, shareholders who got in near JNUG's bottom have seen 200% gains, but they may have experienced big losses in the lead up to the bottom. Robinhood account holders may have hit their limit in how much risk they were willing to take!
Roundhill Sports Betting & iGaming ETF (BETZ)
This is a bit of an unusual case since BETZ is only a month old. Given the industry it was operating in, it got a lot of attention right off the bat. Robinhooders, who generally like to play the latest fads and trends, jumped on board as well and quickly built notable positions.
The initial buzz wore off the product even though performance wasn't that bad. I think this is simply a case of the shine coming off the new product a bit and isn't necessarily indicative of a major sentiment shift. I think we'll likely see this one getting built back up again in the future.
