SPECIAL REPORT The Top 7 Stocks for 2024

Jim Cramer ETFs: What to Know as Tuttle Capital Launches LJIM, SJIM Funds


  • Tuttle Capital Management recently launched two new exchange-traded funds (ETFs) focused on media personality Jim Cramer.
  • Long Cramer Tracker ETF (LJIM) sides with Cramer while Inverse Cramer Tracker ETF (SJIM) goes against him.
  • These Jim Cramer ETFs enable critics to put their money where their mouth is.
the word "etf" spelled out in many yellow cubes against a background of many black cubes
Source: shutterstock.com/Imagentle

Seemingly to his annoyance, Tuttle Capital Management recently launched two exchange-traded funds (ETFs) centered on CNBC media personality Jim Cramer. On one end, those siding with Cramer’s recommended market ideas can acquire units of Long Cramer Tracker ETF (NYSEMKT:LJIM). Meanwhile, those opposed to Cramer’s views can target Inverse Cramer Tracker ETF (NYSEMKT:SJIM).

In theory, Jim Cramer ETFs should offer some robust engagement. After all, Cramer is a polarizing figure. As BNN Bloomberg pointed out, plenty of lovers and loathers of the media personality exist, with his brash and outspoken style rubbing some the wrong way. And of course, Cramer also doesn’t get it right all the time. Not too long ago, he apologized for recommending Meta Platforms (NASDAQ:META) after its stock implosion.

Still, the controversy around this market expert makes for (on the surface, at least) compelling narratives. Essentially, the Jim Cramer ETFs allow people to do more than just yell at their TV screen. Now, they can take a more active role in response to Cramer’s remarks.

In other words, the fans can finally put their money where their mouth is. The press release for the ETFs states:

“SJIM and LJIM offer investors of all sizes and types convenient ‘one-ticker’ access to take sides on Jim Cramer’s recommendations that may otherwise be difficult to execute on their own.”

Below are five things to consider regarding the Jim Cramer ETFs.

1. The Jim Cramer ETFs Are ‘Low Tech’

According to BNN Bloomberg, “the methodology behind the ETFs is decidedly low-tech.” Apparently, Tuttle and company watch Cramer’s TV coverage and Twitter account throughout the day to design the equal-weighted portfolios. The result is “two actively managed portfolios that hold between 20 to 50 names with a high turnover rate.”

Put another way, you might be better off acquiring individual stocks rather than the Jim Cramer ETFs.

2. Cramer Doesn’t Like ETFs

Speaking of which, Jim Cramer himself doesn’t like ETFs. According to a CNBC report from 2017, the TV personality had the following to say about these kinds of funds:

“You want to be in a stock because it’s the best name in a sector that’s growing. You don’t want to be in a group of mediocre stocks that will pull down the high-quality stock you’ve chosen.”

By that logic, Cramer won’t be a fan of the Jim Cramer ETFs.

3. It’s Game On

While Cramer himself may be annoyed by the development of these ETFs, he’s still up to the challenge. Per Benzinga, Cramer had some choice words regarding the launch of the funds:

“As always I welcome people betting against me. I have done this for 42 years.”

Cramer then proceeded to list out his success stories with Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Nvidia (NASDAQ:NVDA) and other stocks.

4. The ETFs Are Pricey

When it comes to the Jim Cramer ETFs, both products feature an expense ratio of 1.2%, which is something potential investors should keep in mind. According to Investopedia, a good expense ratio for investors is “around 0.5% to 0.75% for an actively managed portfolio” while anything “greater than 1.5% is considered high.”

To be fair, 1.2% is a bit lower than Investopedia’s benchmark for a high expense ratio. However, it’s not cheap. Again, that means investors may be better off selecting viable, individual stocks.

5. A Mixed Record

While some investors make snide remarks about Cramer being a breathing contrarian index, the truth is more complicated than that. In 2016, Wharton graduate students investigated the performance of Cramer’s stock portfolios over a 15-year period. They discovered that Cramer’s “Action Alerts Plus” portfolio “returned 64.5 percent cumulatively since its inception in 2001.” However, the S&P 500 returned 70% during the same period “after adjusting for the reinvestment of dividends.”

With this context, Cramer underperformed slightly, but that doesn’t justify the most spiteful of criticisms. Therefore, the Jim Cramer ETFs could be interesting for certain investors.

On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2023/03/jim-cramer-etfs-what-to-know-as-tuttle-capital-launches-ljim-sjim-funds/.

©2024 InvestorPlace Media, LLC