Industry Updates

Inverse Jim Cramer ETF closes

The ETF will be liquidated less than a year after launch

Sumit Roy

Jim Cramer

Maybe betting against Jim Cramer is not such a good idea. About 11 months ago, Tuttle Capital Management launched the Inverse Cramer Tracker ETF (SJIM), an attempt to capitalise on Cramer’s reputation as a lousy stock picker.

SJIM started along with the Long Cramer Tracker (LJIM), which took the opposite strategy as SJIM – betting on the stocks that Cramer recommended.

However, a lack of interest in the strategy caused LJIM to shutter just six months after its debut. Now five months later, SJIM is meeting the same fate as its counterpart. 

Tuttle Capital Management announced last Thursday that SJIM will be liquidated in February. Explaining why the ETF was shutting down, Matthew Tuttle, portfolio manager at Tuttle Capital Management, said that he did not have the time to keep running the portfolio. 

“We started [the ETF] to point out the danger of following TV stockpickers, Jim Cramer specifically, and the total lack of accountability,” Tuttle said.

“We feel like we have accomplished that mission, but retail investors are more focused on volatile products and the interest in a long/short portfolio never fully materialised.” 

SJIM only $2m AUM

SJIM only had $2m assets under management (AUM), as at 26 January, a paltry sum for an ETF with a strategy that is cumbersome to employ.

Tuttle decides which trades to make based on commentary Jim Cramer makes on CNBC and Twitter.

That required members of Tuttle’s team to constantly monitor the media for new updates from Cramer. Not only is the process time-consuming, but it is also subjective. 

Cramer makes a multitude of calls, so deciding which ones to bet against – and when to close those inverse bets – takes discretion.    In other words, even if it is the case that Jim Cramer is a bad stock picker, the sheer number of calls he makes and the speed at which he shifts gears makes it difficult to devise a repeatable blueprint for betting against him. 

The numbers bear that out. Since launching last March, SJIM is down 15%, sharply underperforming the 25% gain for the S&P 500 and the 19% gain for the First Trust Long/Short Equity ETF (FTLS) in that same period.

Tuttle said that he will continue to publish his Cramer Tracker daily newsletter for people who want to monitor Jim Cramer’s recommendations and perhaps try their hand at betting against him on their own.

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