Kevin Paffrath, a YouTube personality whose “Meet Kevin” channel boasts nearly 2 million subscribers, is lending his name to an exchange-traded fund investing in Apple Inc., Tesla Inc. and other companies it believes can boost prices of their products without crimping demand.
The Meet Kevin Pricing Power ETF (PP), with $500,000 in assets, fell 10 cents to $19.88 in its first day of trading on NYSE Arca. Nearly 200,000 shares of the actively managed fund, which has an expense ratio of 0.77%, had traded.
Managed by 30-year-old Paffrath, PP’s top stock holdings include Taiwan Semiconductor Manufacturing Company and The Trade Desk. It also holds several ETFs focused on currencies and bonds, including the Invesco DB U.S. Dollar Index Bearish Fund (UDN) and the US Treasury 2 Year Note ETF (UTWO).
“The vast majority of companies that we invest in, we are looking for positive cash flow, free cash flow, earnings per share and growth – anything that ensures these companies do prove pricing power,” Paffrath told ETF Stream's sister publication ETF.com.
Paffrath was a real estate broker when he started uploading videos on YouTube toward the end of 2017, hoping to catch the attention of a few people surfing the internet, looking for advice on how to strike a good deal in the housing market. Calling himself a “30-year-old dad and financial analyst,” he’s an established “YouTuber.”
He told ETF.com he is looking for both profit-generating and sustainable companies, though sustainability is not a criterion when selecting holdings. The launch comes during a turbulent time for technology, as Facebook parent Meta Platforms, Coinbase Global, Microsoft and others cut jobs and freeze hiring. Volatility in crypto has further hurt tech investments.
Despite falling share prices, an October study conducted by Gartner projects information technology spending to increase by 5.1% in 2023, citing a strong demand for digital business initiatives. BlackRock's recently released outlook for 2023 promised growth in cybersecurity and robotics as well.
The internet personality announced the launch of PP on his YouTube channel, alerting his subscribers about the availability of the product once it began trading, with one subscriber commenting “just bought $100 of your PP” minutes after the video went live.
Paffrath said he expects his first set of investors to be retail investors, primarily viewers that have subscribed to his channel – a demographic he said comprises mostly 25- to 45-year-old males living in the US. The channel, which was once dedicated to just real estate, now showcases commentary on the markets and economy, cryptocurrency and, sometimes, even politics.
Finance to politics ...and back again
The YouTuber ran in the 2021 California gubernatorial recall election in an attempt to replace Governor Gavin Newsom – an unsuccessful effort he said pushed him to launch his first ETF.
Though he had initially thought of starting a brokerage firm after the election, he realised toward the end of the year the industry was slowing down, with very few people looking to brokers for financial decision-making.
“Once I learned about the tax benefits of ETFs and their unique advantage of changing its contents with little to no tax obligations, I knew that was the product for me,” he said.
Paffrath pulled filings of three ETFs he had previously submitted to the Securities and Exchange Commission in August, citing a desire to focus solely on PP for now. He said the performance of this fund would determine the possibility of more ETFs in the future.
This story was originally published on ETF.com