Robinhood’s entry into the S&P 500 isn’t only a watershed moment for the firm. It’s sending waves throughout ETFs that already own, or trade around, the hot stock.
Robinhood is up 500% in the past year. Check out its prices, live.
The brokerage’s 15%-plus stock pop earlier this week on confirmation of its inclusion in the S&P 500 seals Robinhood’s status as an index fund must-own. That’s a double fueling: passive inflows that automatically buy the stock, and new attention from retail traders attracted by a high-flying break-out name they are already familiar with.
Also Read: Robinhood Fills ‘Glaring Product Gap’—Analyst Calls It A Game-Changer
This isn’t a stealth reshuffling for ETFs, it’s a momentum event. Funds that were already exposed to Robinhood now have the potential to benefit from both flows and volatility. ARK Fintech Innovation ETF (BATS:ARKF) includes Robinhood in its top holdings, wagering on the development of fintech from disruptor to mainstream. SMART Trend 25 ETF (NYSE:STRN) includes HOOD in its tactical growth portfolio. T-Rex 2X Long HOOD Daily Target ETF (BATS:ROBN) is the adrenaline injection, amplifying the daily moves of HOOD for short-term traders.
The effect doesn’t end there. ETFs constructed based on brokerage, crypto, or fintech platforms such as YieldMax Dorsey Wright Hybrid 5 Income ETF (NASDAQ:FIVY) or YieldMax Crypto Industry & Tech Portfolio Option Income ETF (NYSE:LFGY) may capitalize on the swell of heightened trading volumes and option premiums.
Even S&P 500 and smart-beta funds with wide mandates might now be sneaky buyers of Robinhood, simply by virtue of their tracking or overweighting of new arrivals. That means, in other words, HOOD’s rally is no longer all about retail fervor, it’s also about institutional obligation.
With Robinhood stock up more than 500% over the last year and another earnings beat on tap for late October, the stock’s path from meme-driven curiosity to S&P 500 stalwart has now become an ETF tale.
Moreover, Robinhood launched a set of fresh tools for active traders — a social network, AI-driven trading functionality, futures instruments, and ladder trading — as part of a Las Vegas launch aligned with the F1 Grand Prix. The initiative is part of CEO Vlad Tenev’s strategy to make Robinhood a “financial superapp.” Analysts were upbeat, with Mizuho raising its price target to $145 and Piper Sandler reaffirming a $120 target, both holding bullish ratings. This adds to the bullish case for ETFs exposed to Robinhood.
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