Renowned Wall Street figure Jim Cramer’s foray into the world of Exchange-Traded Funds (ETFs) faces a setback with the impending closure of the Inverse Cramer Tracker ETF (SJIM). The short fund, designed to capitalize on Cramer’s stock recommendations, is set to cease trading on February 13, having attracted only $2.4 million in assets since its launch in March 2023.
This development follows the closure of Tuttle Capital Management’s Long Cramer Tracker ETF (LJIM) five months ago, which focused on investing in stocks recommended by Cramer but struggled to gain substantial assets.
SJIM, despite its ambitious objective, has experienced a 15% decline on a total return basis since its launch, marking its demise against the backdrop of a challenging year for ETF closures.
Jane Edmondson, head of thematic strategy at TMX VettaFi, commented on the broader trend, stating, “There are a lot of ‘fad’ thematics, not tied to sound economic principles. Sadly, most of them are destined to fail.”
Cramer, known for his outspoken on-air persona and a track record of mixed stock recommendations, responded to the news with a tweet. In 2022, he had welcomed those betting against him, emphasizing the success of companies like Apple Inc., Google parent Alphabet Inc., and Meta Platforms Inc.
The two ETFs were conceived by Tuttle Capital Management’s CEO, Matt Tuttle, who also manages the $146 million AXS Short Innovation Daily ETF (SARK), designed to bet against Cathie Wood’s flagship fund. Tuttle, in collaboration with REX Shares, also introduced ETFs offering double-leveraged exposure to individual stocks such as Tesla Inc. and Nvidia Corp.
Tuttle acknowledged that retail investors’ focus on volatile products and a lack of sustained interest in long/short portfolios played a role in SJIM’s closure. He also expressed that SJIM was initiated to highlight the risks associated with following TV stock pickers, particularly citing Jim Cramer’s perceived lack of accountability. A spokesperson for CNBC declined to comment on the matter.
In summary, Jim Cramer’s ETF venture faces a significant setback, highlighting the challenges of implementing investment strategies based on TV personalities’ recommendations in the ever-evolving landscape of ETFs.
