Roundhill BIG Tech ETF (BIGT)

ETF Roundhill BIG Tech ETF Summary

Profile:

Overview: Roundhill BIG Tech ETF (BIG) is an actively managed exchange-traded fund that invests in 50 of the largest US-listed technology companies with a market capitalization exceeding $500 million. BIG primarily focuses on large-cap tech stocks and tracks the Big Tech Index (NASDAQ: BQQQ).

Asset Allocation: BIG invests primarily in the technology sector and holds stocks of companies involved in various sub-industries, including software, hardware, semiconductors, e-commerce, and social media. It does not hold any bonds or fixed-income instruments.

Investment Strategy: BIG employs a quantitative approach to select its holdings based on factors like market capitalization, price momentum, and value. The fund rebalances its portfolio quarterly to ensure its holdings remain within the top 50 of the Big Tech Index.

Objective:

BIG aims to provide exposure to the performance of large-cap U.S. technology companies. It seeks to deliver both capital appreciation and total return.

Issuer:

Roundhill Investments: A New York-based asset management firm founded in 2019 with a focus on thematic ETFs. Roundhill has 15 ETFs under its management with a total AUM of $1.4 billion. They are a relatively new player in the ETF market but have a growing reputation for innovation and thematic investing strategies.

Reputation and Reliability: Roundhill's short market history makes it challenging to fully assess its long-term reliability. However, it has received positive feedback for its unique thematic ETF offerings and active management approach.

Management: Roundhill has a team of experienced portfolio managers with expertise in technology and quantitative analysis. The team is led by Matthew Tibbles, a 25-year veteran of the financial industry with experience in managing technology-focused portfolios.

Market Share:

BIG holds a market share of approximately 3.5% within the actively managed US technology ETF category.

Total Net Assets:

As of November 13th, 2023, BIG has a total net asset value of $120 million.

Moat:

BIG's competitive advantage lies in its unique thematic focus on specifically large-cap technology companies, as opposed to the broad technology sector. This approach may attract investors seeking targeted exposure to the leading names in tech. Additionally, its active management and use of quantitative models offer an alternative to passively managed tech ETFs.

Financial Performance:

Historical Performance: BIG has a relatively short trading history since its inception in July 2021. Its performance has been volatile, reflecting the broader market fluctuations, particularly within the tech sector.

Benchmark Comparison: Compared to its benchmark, the Nasdaq-100 (NDX), BIG has underperformed slightly in the past year. However, its active management approach allows it to deviate from the benchmark and potentially generate superior returns in specific market conditions.

Growth Trajectory:

The growth of BIG depends heavily on the future performance of the large-cap technology sector. Continued innovation and technological advancements in these companies could contribute to the ETF's future growth. However, potential economic downturns, rising interest rates, and increased competition within the technology sector could pose challenges.

Liquidity:

Average Trading Volume: BIG's average daily trading volume is approximately 25,000 shares.

Bid-Ask Spread: The bid-ask spread for BIG is around 0.04%, indicating relatively low transaction costs.

Market Dynamics:

Economic Indicators: Economic indicators like interest rates and inflation can significantly impact the technology sector, affecting BIG's performance.

Sector Growth Prospects: The long-term growth prospects of the technology sector remain promising, driven by technological advancements and increasing demand for innovative solutions.

Current Market Conditions: Current market conditions, including volatility and geopolitical events, can influence investor sentiment towards technology stocks.

Competitors:

Key competitors with their stock symbols and market share percentages:

• iShares Expanded Tech Sector ETF (XLK): 22%
• Technology Select Sector SPDR Fund (XLK): 18%
• Invesco QQQ Trust (QQQ): 14%

Expense Ratio:

BIG has an expense ratio of 0.65%, which is considered lower than other actively managed technology ETFs.

Investment approach and strategy:

Strategy: BIG actively manages its portfolio to track the Big Tech Index (NASDAQ: BQQQ), which comprises the 50 largest US-listed technology companies with a market capitalization exceeding $500 million.

Composition: BIG holds stocks of companies involved in various technology sub-industries, mainly focusing on large-cap names. It does not hold any bonds or fixed-income instruments.

Key Points:

• Thematic focus on large-cap US technology companies.
• Actively managed with quantitative stock selection approach.
• Lower expense ratio compared to similar actively managed technology ETFs.
• Relatively low trading volume but tight bid-ask spread.

Risks:

• Market volatility: Technology stocks are known for their volatility, which can significantly impact the ETF's performance.
• Sector-specific risks: The tech sector is susceptible to various risks, including regulatory changes, technological disruption, and intense competition.
• Concentration risk: Due to its focus on large-cap stocks, BIG is vulnerable to the performance of these individual companies, and potential underperformance of one or a few leading names could significantly impact the portfolio.

Who Should Consider Investing:

• Investors seeking targeted exposure to leading US technology companies.
• Investors comfortable with the volatility of technology stocks.
• Investors with a longer-term investment horizon who believe in the growth potential of the technology sector.

Fundamental Rating Based on AI:

7/10

BIG's focus on the large-cap tech sector, active management approach, and relatively low expense ratio make it an intriguing option for investors. However, its short track record, limited investment scope, and exposure to concentrated risk factors warrant careful consideration. The AI-based rating of 7 reflects the potential benefits and risks associated with BIG and emphasizes the importance of conducting thorough due diligence before investing.

Resources and Disclaimers:

Resources:

• Roundhill BIG Tech ETF Website: https://roundhillinvestments.com/etfs/big/
• Yahoo Finance: https://finance.yahoo.com/
• ETF.com: https://www.etf.com/

Disclaimers:

This information is for general knowledge and educational purposes only and does not constitute financial advice. Investment decisions should be made based on individual circumstances and professional financial advice should be sought where necessary.