The last two years saw the rise, but not the complete fall, of “finfluencers.” With a younger generation opening financial accounts and rushing headlong into things like meme stocks and cryptocurrencies, these social-media financial influencers could temporarily create billions of dollars in market value through their recommendations, while earning tens of millions for themselves.
One of the most successful, until recently, was
Kevin Paffrath,
known to his 1.84 million YouTube followers as “Meet Kevin.” He morphed from being a real-estate guru to doling out general investing advice, with popular videos like “How to Retire in 7 Years Starting w/$100 [The Rule of 200].”
Mr. Paffrath recently earned a mention in The Wall Street Journal for his role in drumming up business for bankrupt crypto exchange FTX, for which he revealed he was paid per mention. He told an interviewer from “The Journal” podcast in May that he earned $22 million in 2021 from financial-influencer activities but that a bearish turn earned him vitriol and hurt his income.
A common criticism of pundits, whether they are CNBC talking heads or the newer variety that sometimes accept direct compensation like Mr. Paffrath, is that they can tout their wins and play down their losses. But, as of this week, Mr. Paffrath will have a verifiable track record via an actively managed fund he will help advise.
The Meet Kevin Pricing Power Exchange Traded Fund will hold companies with a “track record of disrupting mature industries (e.g., electric vehicles) or operating within disruptive industries (e.g., social media, blockchain), and/or a company’s historical patterns of launching hardware or software products that are first-to-market.” More than a fifth of the fund is in shares of
according to a securities filing.
Fund management is a tough business and many ETFs fail to gain traction even when markets are frothy, which they aren’t at the moment. Luckily for Mr. Paffrath, being telegenic sometimes trumps actually enriching investors. A case in point is one-time star manager
Cathie Wood,
whose actively managed ETFs have badly lagged behind the market since early last year but continue to attract inflows. Ms. Wood is also still frequently sought out for her opinions, predicting in recent media interviews that the price of bitcoin will reach $1 million by 2030 from around $16,000 now, that the U.S. will enter a deep recession and that, despite that, her fund will return 50% a year.
Mr. Paffrath, who couldn’t be reached for comment, will charge a slightly higher expense ratio than Ms. Wood does for her main fund—a bold move in a bear market for stocks and punditry. Perhaps that makes it a good time, though. As he hopefully said in a recent video: “We get to be a part of the rebound.”
Write to Spencer Jakab at Spencer.Jakab@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8