Meet the ETF Portfolio Managers Trying Their Luck With Meme Stocks AMC and GameStop

Some brand new exchange-traded funds are dabbling in meme stocks, chasing returns in a bid to pull in assets.

Shares of GameStop Corp. , AMC Entertainment Holdings Inc. and BlackBerry Ltd. have surged this year on the back of individual investors who talk up their trades on social media. Many professional stock pickers have largely sat out the mania, with some on Wall Street, like Morgan Stanley Chief Executive James Gorman, calling the dramatic run-up in share prices dangerous.

Still, a few actively managed ETFs are trying to surf the retail meme-stock mania, gambling on their ability to get out in time once the rally eventually fizzles, including the Qraft AI-Enhanced U.S. Next Value ETF and Principal Financial Group Inc.’s

It’s a big risk, analysts say. Investors, from multibillion-dollar hedge-fund managers to individual traders, often come up short in timing trades. Many get into a rallying stock too late or cut out after losses have started accumulating.

“The positive momentum for these volatile securities could be short-lived,” said Todd Rosenbluth, head of ETF and mutual fund research at CFRA. “New, actively managed ETFs’ strong performance out of the gate can help garner investor interest in increasingly crowded markets, but such demand may disappear if losses pile up,” he said.