Market Overview

Roundhill Brings Carlisle's Acquirers Fund Into ETF Fold

Roundhill Brings Carlisle's Acquirers Fund Into ETF Fold

Roundhill Investments is adding to its exchange-traded fund roster with the addition of the Acquirers Fund, a deep value play managed by Tobias Carlisle.

What Happened: The Acquirers Fund, a long/short ETF that previously traded under the ticker “ZIG” is now the Roundhill Acquirers Deep Value ETF (NYSE: DEEP). The new iteration of the value ETF tracks the Acquirers Deep Value Index.

“The Acquirers Deep Value Index seeks to find undervalued stocks using the Acquirer’s Multiple, the same measure used by activists and buyout firms to identify targets,” according to Roundhill.

Why It's Important: DEEP is the third ETF in the Roundhill stable, joining the scintillating Roundhill BITKRAFT Esports & Digital Entertainment ETF (NYSE: NERD) – a fund that's up more than 67% this quarter – and the Roundhill Sports Betting & iGaming ETF (NYSE: BETZ).

BETZ is the first ETF dedicated to sports betting and online casinos. The fund debuted on June 4 and already has $84 million in assets under management, easily making it one of this year's most successful ETF launches.

DEEP brings another $18 million in assets to the Roundhill roster. The addition of the fund to the issuer's lineup could be well-timed given value's lengthy underperformance relative to the growth factor. Value stocks, or those names with lower price-to-earnings, price-to-cash-flow and comparable metrics, have actually performed growth stocks over long holding periods. As measured by the Russell 1000 Value Index, value outperformed growth from the end of 1999 through June 18, 2020.

DEEP's benchmark keeps with the value theme as it trades at just 9.7 times earnings, 1.9 times price-to-book and just 0.8 times price-to-sales, all ratios that compare favorably with broader equity indexes.

What's Next: All of DEEP's holdings are mid- or large-cap names and the median market value of the fund's 20 components is $8.4 billion. That's right. DEEP has just 20 holdings, making it a highly focused ETF.

DEEP is focused at the sector level as well as just five of the 11 GICS sectors are represented in the fund – financial services, technology, health care, industrials and consumer discretionary. Financial services and technology stocks combine for almost 60% of DEEP's weight.

DEEP's annual fee is 0.80% per year, or $80 on a $10,000 investment. That's less than the 0.94% charged by the old ZIG.


Related Articles (NERD + BETZ)

View Comments and Join the Discussion!

Posted-In: Long Ideas Broad U.S. Equity ETFs New ETFs Trading Ideas ETFs