In this article, we discuss the 10 ETFs popular on Robinhood. If you want to read about some more ETFs popular on Robinhood, go directly to 5 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.
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Disclosure. None. 10 ETFs Popular on Robinhood is originally published on Insider Monkey.
