eToro, an Israel-based social trading network, has announced the launch of a new social sentiment portfolio dubbed SocialSentiment. The latest addition to the eToro's product lineup offers retail investors exposure to the US-listed companies known for their solid ESG efforts.

Sentifi and eToro Join Ranks

According to Monday's press release, the newest social sentiment portfolio was created in collaboration with Sentifi, an AI-driven alternative data engine that analyzes more than 2 million news and 500 million tweets per day to gather up-to-date trading signals.

Sentifi analyzes over 50,000 instruments, including currencies, commodities, indices, stocks, and funds. In creating portfolios, such as SocialSentiment, it examines market sentiments associated with a given asset by assigning it a 'sentScore'. In the case of SocialSentiment, this has enabled the creation of a portfolio that tracks companies with positive social chatter.

"eToro pioneered social investing and showed how the power of social can empower people around the world to build their wealth and take control of their finances. With this portfolio, we aim to offer retail investors exposure to stocks that are being discussed in a positive light on social and digital channels, adding an extra layer of insights. We are looking forward to partnering with the Sentifi team, and working together to harness the power of social networks," Dani Brinker, the Head of Investment Portfolios at eToro.

The monthly-rebalanced portfolio includes the top 10 S&P 500 stocks that meet social sentiment and ESG criteria, ranked by their lowest risk over attention-weighted sentiment score. With a minimum investment of USD$500, investors can easily monitor the performance of their portfolio using eToro's advanced tools and charts while staying informed on sector developments through its social feed. However, the portfolio is currently unavailable for US investors.

Currently, companies incorporated in the portfolio include Verisign, Teradyne, Dollar Tree, Alistate and F5 Networks, among others.

"Social networks, news, blogs and forums are a valuable source of changing risk for asset classes and offer dynamic views on ESG performance appreciation and degradation for companies globally – essential for constructing portfolios that outperform a benchmark. Sentifi is delighted to partner with eToro to offer eToro's Social Sentiment portfolio," Marina Goche, the CEO at Sentifi, added.

In the late-January, eToro presented another new smart portfolio, InvestorAI-US, that uses artificial intelligence to provide retail investors' exposure to the stocks of 12 high-growth United States companies.

eToro's Clients Confident about Their Portfolios

According to the most recent eToro survey conducted a month ago, a significant portion of retail investors (69%) feel confident about their investment portfolios. This newfound confidence may be attributed to a decreased concern regarding the perceived threat of inflation among investors and occurs despite the extended bear market that plagued financial markets in 2022.

The report indicates that a higher proportion of young retail investors (76%) between 18-34 display more risk tolerance, with a positive or indifferent attitude toward the 2022 downtrend. Conversely, only 60% of older investors aged 55 and above share this sentiment.

"The fact that two thirds of retail investors feel indifferent, or even more positive, after the worst year for markets in a generation might seem odd. But the majority of this cohort think in years and decades. For those with longer time horizons, the back end of 2022 has offered a chance to buy companies at lower valuations, improving the outlook for long term returns," Ben Laidler, the Global Markets Strategist at eToro, commented.

eToro Opens Up to Brazilians and New Yorkers

In the two updates published in February, eToro revealed the expansion of its services in the Americas. The social trading network has been granted a virtual currency license, also known as BitLicense, by the New York State Department of Financial Services. The license was obtained through eToro NY LLC, the trading network's subsidiary in the United States.

According to a statement on its website, eToro informed that the newly acquired licenses would allow it to provide New Yorkers with trading features for stocks, crypto, and options. On top of that, the company expressed its intention to expand its virtual portfolio and integrate social investing tools to residents of New York once eToro NY LLC becomes operational.

In the meantime, the company has broadened the range of assets available for investment by its users in Brazil. Previously, traders who were onboarded on or after 28th February last year in the Latin American country were only able to trade cryptocurrency positions based on the Brazilian real.

Thanks to the newest update, Brazilian customers are now eligible to trade exchange-traded funds, stocks and contracts for difference, with the exemption of forex instruments.