Robinhood unveils new 'investor index' of top 100 stocks

Yahoo Finance Live checks out trading platform Robinhood's move to debut its conviction-based investor index.

Video Transcript

RACHELLE AKUFFO: It's time for Triple Play, about 25 minutes before the closing bell. And we've got Robinhood, Amazon, and Kroger on deck. So starting off with Robinhood, ticker HOOD, now that caught my eye as it unveiled its new investor index to track the top 100 most owned investments by users. The stock up about 5 and 1/2% there, and the stock is actually up for the week as well.

Now, large caps overwhelmingly favored by 75% of those investors in that index. You have Tesla, Apple, Amazon, Ford, and AMC in the top five to kick it off. Now, it will be updated every month. And Robinhood's chief brokerage officer, Steve Quirk, told CNBC that the platform wants to grow with its 23 million users that it brought on, as well as help them validate their investments by seeing how others on the platform are investing.

Now Robinhood's blog states, it isn't weighted by dollars, but by conviction. We measure a customer's conviction for each investment by looking at the percentage it makes up of their portfolio. Now, the most consistent themes include tech users that-- tech that users interact with every day-- Microsoft, Apple, Amazon. Also a growing commitment to EVs, which is why Tesla tops, as well as Ford and NIO also on that list. And then, of course, entertainment, which is why Disney and AMC are up there, too.

Now, some of these trendier stocks, like the pandemic darlings, and, of course, the meme stocks as well, those also tend to make appearances. But this, Seana, is another way to really track what retail investors are interested in. Robinhood itself, though, interestingly, though, down about 40% year to date. So they don't seem to be investing in Robinhood.

SEANA SMITH: Yeah, that's an easy assumption, I guess, to make at this point, with the stock off 40%. I don't know how this is all going to play out. We know Robinhood has tried sharing data in the past back in 2020. They quickly reversed their policy there. There's some questions about what exactly this intel could mean, not only for the retail traders, but also for the institutional side. So I'm not so sure about how long this index is going to be out there. But I don't know. We're going to have to wait and see. At least it will be interesting to see where retail traders are placing their bets right now.