Roundhill targets mega-cap tech in second ‘BIG’ ETF

Apr 19th, 2023 | By | Category: Equities

Roundhill Investments has added to its ‘BIG’ ETF suite with a new fund providing focused exposure to the largest and most influential US-listed ‘technology’ companies.

US Technology sector ETFs

The fund provides equally weighted exposure to five of the largest and most influential ‘technology’ stocks.

Listed on Nasdaq, the Roundhill BIG Tech ETF (BIGT US) targets just five information technology and technology-related companies known collectively by the “FAAMG” acronym: Meta Platforms (Facebook), Apple, Amazon, Microsoft, and Alphabet (Google).

BIGB is actively managed, utilizing swap agreements and forward contracts to enact its positions. The fund follows a rules-based process; however, rebalancing its portfolio to equal weights on a quarterly basis.

According to Roundhill, BIGT stands out from traditional technology-focused ETFs which typically track large, diversified baskets of companies across various sectors and industries. The firm notes that the Nasdaq 100, a popular benchmark for tech exposure, includes a diverse array of non-tech companies such as PepsiCo and Costco. In contrast, BIGT delivers a more targeted approach, focusing just on the technology giants at the forefront of innovation in cloud computing, e-commerce, and artificial intelligence, amongst others.

Dave Mazza, Chief Strategy Officer at Roundhill Investments, said: “Investors recognize that the FAAMG companies are not only leaders in their respective technologies but also the largest in terms of revenues, profits, and market capitalization. BIGT provides a unique opportunity for investors to gain focused exposure to these technology giants which are shaping our digital landscape and driving growth across multiple industries.

“With all of the market uncertainty in 2023, investors are seeking safety in FAAMG stocks which are viewed as amongst the highest-quality companies globally.”

The fund is the second ‘BIG’ ETF from Roundhill following the launch of the Roundhill Big Bank ETF (BIGB US) which delivers equally weighted exposure to six of the largest and most influential US banks: Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, JP Morgan, and Wells Fargo.

Both BIGT and BIGB come with expense ratios of 0.29%.

According to Roundhill’s website, the firm will be rolling out two additional BIG ETFs in the near future focusing on the largest companies within the airlines and defense industries, while filings with the SEC indicate a further two funds based on the oil and railroad industries are also in the pipeline.

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