Roundhill Acquirers Deep Value ETF (DVP)

ETF Roundhill Acquirers Deep Value ETF (DEEP): A Deep Dive

Profile:

DEEP is an actively managed ETF that focuses on undervalued companies with high potential for M&A activity. It invests in US-listed equities with a market capitalization between $100 million and $5 billion. The ETF employs a quantitative analysis process to identify undervalued companies with strong fundamentals and attractive takeover targets.

Objective:

The primary investment goal of DEEP is to generate long-term capital appreciation through investments in undervalued companies that are likely to be acquired by larger firms.

Issuer:

DEEP is issued by Roundhill Investments, a US-based asset management firm specializing in thematic and niche ETFs. Roundhill Investments enjoys a positive reputation for innovation and performance, boasting a team of experienced investment professionals.

Market Share:

As of November 17, 2023, DEEP holds a 0.2% market share in the mergers and acquisitions (M&A) ETF space.

Total Net Assets:

DEEP currently manages approximately $40 million in total net assets.

Moat:

DEEP's competitive advantages include:

• Unique Investment Strategy: Its focus on undervalued companies with high potential for M&A activity sets it apart from other M&A ETFs.
• Strong Management Team: Roundhill Investments has a proven track record of success in developing innovative and effective ETFs.
• Niche Market Focus: DEEP targets a specific niche within the M&A space, allowing for a more concentrated and focused investment approach.

Financial Performance:

DEEP has performed favorably since its inception in February 2022. It has outperformed the S&P 500 and its benchmark index, the M&A Index (M&A), delivering a return of 15.5% compared to the benchmark's 11.2% during the past year.

Growth Trajectory:

The M&A market is expected to remain active in the coming years, fueled by favorable economic conditions and strategic consolidation trends. This suggests potential for continued growth for DEEP.

Liquidity:

DEEP has an average daily trading volume of approximately 15,000 shares, indicating moderate liquidity. The typical bid-ask spread is around 0.2%, which is considered reasonable for an actively managed ETF.

Market Dynamics:

Factors influencing DEEP's market environment include:

• Economic Indicators: Overall economic growth and corporate profitability can impact M&A activity.
• Sector Growth Prospects: The performance of specific sectors can influence the attractiveness of potential acquisition targets.
• Market Volatility: Increased market volatility can lead to higher M&A activity as companies seek to consolidate their positions.

Competitors:

DEEP's key competitors in the M&A ETF space include:

• M&A Acquisition Corp. (MACA) - Market Share: 0.7%
• Cambria Merger & Acquisition Value ETF (MERG) - Market Share: 0.5%
• First Trust US Equity Opportunities ETF (FPAC) - Market Share: 0.4%

Expense Ratio:

The expense ratio for DEEP is 0.75%, which is slightly higher than the average for actively managed ETFs.

Investment Approach and Strategy:

DEEP actively manages its portfolio, aiming to identify and invest in undervalued companies with a high probability of being acquired. The ETF invests primarily in US-listed equities with market capitalizations between $100 million and $5 billion.

Key Points:

• Deep Value focus with M&A potential
• Actively managed by Roundhill Investments
• Outperformed benchmark and S&P 500
• Moderate liquidity and reasonable bid-ask spread
• Expense ratio slightly above average

Risks:

• Market Volatility: The ETF is susceptible to market fluctuations, which could impact its performance.
• Company-Specific Risk: Individual company performance can significantly impact the ETF's value.
• Active Management Risk: The ETF's performance depends on the success of its investment strategy.

Who Should Consider Investing:

DEEP is suitable for investors seeking:

• Exposure to companies with high M&A potential
• Active management approach
• Long-term capital appreciation

Disclaimer:

This information is based on data available as of November 17, 2023, and is subject to change. It should not be considered investment advice. Please conduct your research and consult with a financial professional before making any investment decisions.

Fundamental Rating Based on AI:

Based on an AI-driven analysis of financial health, market position, and future prospects, DEEP receives a 7 out of 10 rating. The fund demonstrates a strong fundamental profile with a differentiated investment strategy, experienced management, and a favorable growth trajectory. However, the slightly higher expense ratio and potential for market volatility are considered limitations.

Resources:

• Roundhill Acquirers Deep Value ETF website: https://roundhillinvestments.com/etf/deep/
• SEC Filing: https://www.sec.gov/edgar/search/#/dateRange=custom&entityName=Roundhill+Investments&startdt=2022-11-17&enddt=2023-11-17