Roundhill Investments has ascended to new heights with its exchange-traded funds, particularly with the Magnificent Seven and AI-centric stocks fueling its success.
In the midst of a tech market upheaval, the Roundhill Magnificent Seven ETF MAGS and the Roundhill Generative AI & Technology ETF CHAT have surged by an impressive 15% since the year commenced, almost doubling the returns of the tech-heavy Invesco QQQ Trust QQQ.
In an exclusive conversation with Benzinga, Dave Mazza, the chief strategy officer at Roundhill Investments, unraveled the strategic maneuvers underpinning the company’s robust performance and escalating investor inflows.
Recently, these two ETFs have stood out, drawing the highest inflows within Roundhill’s ETF repertoire.
In just the span of a month, the two ETFs managed an influx of almost $100 million in fresh investments.
Mazza highlighted Roundhill’s focus on innovation as the bedrock of its success.
“We pioneered the world’s first and most liquid metaverse ETF” alongside the Magnificent Seven stocks, Mazza proudly stated.
With a total of 11 funds and a collective $850 million in assets under management, Roundhill has emerged as a central figure in providing innovative and thematic ETFs.
Roundhill’s Financial Fortitude and ETF Triumphs
| ETF Name | AUM ($ mln) | YTD % return |
| Roundhill Ball Metaverse ETF METV | 439.57 | 8.4% |
| Roundhill Magnificent Seven ETF | 149.43 | 14.3% |
| Roundhill Generative AI & Technology ETF | 104.36 | 15.2% |
| Roundhill Sports Betting & iGaming ETF BETZ | 93.23 | 2.3% |
| Roundhill Acquirers Deep Value ETF DEEP | 36.69 | -3.2% |
| Roundhill Video Games ETF NERD | 20.84 | 0.6% |
| Roundhill Cannabis ETF WEED | 9.40 | 35.2% |
| Roundhill Bitcoin Covered Call Strategy ETF YBTC | 4.21 | 9.3% |
| Roundhill S&P Dividend Monarchs ETF KNGS | 3.00 | -2.0% |
| Roundhill S&P Global Luxury ETF LUXX | 1.32 | 7.8% |
| Roundhill Alerian LNG ETF LNGG | 0.72 | -1.4% |
Unveiling the Magnificent Seven’s Equal-Weight Approach
Mazza elucidated why Nvidia Corp. NVDA boasts the top position in Roundhill’s Magnificent Seven ETF.
The ETF adheres to an equal-weight strategy, undergoing quarterly rebalancing. This strategy leads to temporary shifts in the portfolio’s weight in response to stock performance fluctuations within the quarter.
Currently, Nvidia dominates with a 20% share of the portfolio, followed by Meta Platforms Inc. META, while Tesla Inc. TSLA, although trailing in performance, constitutes less than 10% of the portfolio.
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The Art of Selecting AI Stocks at Roundhill
The Roundhill Generative AI & Technology ETF, identified by the ticker “CHAT,” operates as an actively managed fund focusing on pinpointing companies leading the generative AI movement.
To guarantee the authenticity of its selections, Roundhill scrutinizes corporate documents for generative AI language and leverages a proprietary sector scoring system to ensure that revenue derives genuinely from AI.
To make the cut in the ETF, a company must generate “50% or more of its revenue from AI-related business,” Mazza specified.
Metaverse: A Persistent Belief
Despite the fluctuating public opinion and hype, Mazza affirmed Roundhill’s enduring confidence in the metaverse.
The fusion of virtual reality, augmented reality, and the spatial internet is poised to drive substantial innovation deserving of investment in the forthcoming years.
The Roundhill Ball Metaverse ETF, boasting over $439 million in assets under management, stands tall as the company’s prime fund in this domain.
Varied Themes: From Sports Betting to Cannabis and Bitcoin
Mazza further delved into other ETFs within Roundhill’s collection. The Roundhill Sports Betting and iGaming ETF taps into the swiftly expanding U.S. sports betting sector, while the Roundhill Cannabis ETF spotlights the five leading industry players.
He also shed light on the Roundhill Bitcoin Covered Call Strategy ETF, offering potential for steady monthly income through Bitcoin price-linked options, capitalizing on the cryptocurrency’s volatility.
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Illustration via Pixabay.
