Jim Cramer ETFs Goes Live; Could You Make ‘Mad Money’ Counter Trading Him?

Two ETFs began trading on the Chicago Board Options Exchange on Thursday that are focused on stock picks by Mad Money host Jim Cramer.

The newly launched exchange-traded funds (ETFs) will either trade in favor of or against the stock recommendations of Jim Cramer. Cramer is the celebrity host of CNBC’s ‘Mad Money.’ The funds could short-sell his stock recommendations or purchase businesses he advises against.

Both ETFs are actively managed funds.

Cramer’s ETFs Don’t Involve him Directly

Jim Cramer has two new ETFs to his name as he gained notoriety for his subpar cryptocurrency investment advice. The Securities and Exchange Commission (SEC) received the preliminary prospectus for both funds in October 2022.

The advisory company behind the ETFs is Tuttle Capital Management.

“Love him or hate him, Jim Cramer is a polarizing figure,” according to CEO and CIO Matthew Tuttle of Tuttle Capital Management LLC. “We want to give investors on both sides of the debate a way to express their views, and create products that can provide diversification to traditional portfolios.”

According to the prospectus, the ETF adviser keeps tabs on Cramer’s stock picks and general market recommendations throughout the trading day. This includes public recommendations via Twitter or his CNBC television shows. The Fund trades equities or ETFs, including inverse Index ETFs and Index ETFs, to take the opposite position.

That said, the ETFs do not directly involve the television personality. The prospectus states, “Jim Cramer is not involved in the creation, management or operations of the Funds.” Therefore, the Trust, the Funds, and the Funds’ investment adviser removed all affiliation with Jim Cramer or his media outlets.

Both funds have an expense ratio of 1.2%.

Jim Cramer: A Mucky Stock Market Reputation

The “Mad Money” host was part of a study back in 2016. Two students researched Cramer’s stock portfolio for a period of 15 years. The students from Wharton conducted the study after accounting for dividend reinvestment. It found Cramer’s “Action Alerts Plus” portfolio has generated a total return of 64.5% since its inception in 2001, compared to the S&P 500’s 70% return.

The study indicated the underperformance of Cramer’s portfolio under the index. Similarly, both ETFs also highlight investment risks of loss.

In 2021, Cramer called Coinbase an investment for the “long haul” after its listing. However, the 67-year-old CNBC presenter changed his tune once the reports that the SEC was investigating Coinbase hit the industry.

Last year, Cramer apologized to his viewers for his buy call on Meta. He went on air to state, “I made a mistake here. I was wrong. I trusted this [Meta’s] management team. That was ill-advised. The hubris here is extraordinary and I apologize.”

The former hedge fund manager has also infuriated people by switching from being a Bitcoin enthusiast to a cryptocurrency skeptic in a matter of days.

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