5 min readBy Ron Koren ETF Insider
IHF VS XLV
Compare the IHF and XLV ETFs with our thorough analysis. Dive into the performance metrics, underlying assets, and investment strategies.
The DEEP Issuer is Roundhill Investments, also known as the Deep Dive ETF Provider, is a relatively new entrant in the world of exchange-traded funds. Established in 2020, DEEP focuses on offering specialized ETFs designed to provide investors with exposure to niche markets and unique investment strategies. Despite being a newcomer, DEEP has gained attention for its innovative approach to ETF development, creating funds that target specific industries and sectors that are often overlooked by traditional investment vehicles. With a commitment to providing diversified investment options, DEEP aims to cater to the evolving needs of investors looking for alternative sources of income and growth in their portfolios.
DEEP Dividend, managed by Roundhill Investments, employs a passive management strategy to mirror the performance of the Acquirers Deep Value Index. Established in 2020 by Acquirers Funds, LLC, the Index systematically identifies and tracks a portfolio of 100 undervalued, fundamentally strong stocks from the smallest 75% of U.S.-listed stocks by market capitalization, excluding business development companies. Employing The Acquirer’s Multiple® valuation metric developed by Tobias Carlisle, the Index assesses stocks based on holistic valuations, considering assets, earnings, and cash flows. Rigorous evaluations involving statistical measures of fraud, earnings manipulation, and financial distress, along with a forensic-accounting due diligence review, contribute to the selection of the top 100 components. The Index is reconstituted and rebalanced quarterly, employing a buffer to minimize turnover. DEEP Dividend generally follows a replication strategy but may utilize representative sampling under certain circumstances. If the Index concentrates in specific industries, the fund mirrors this concentration to a similar extent. The fund's investment approach is aligned with the Index's methodology, providing investors with exposure to a diversified portfolio of potentially undervalued stocks.
The DEEP ETF utilizes a unique and specialized strategy in tracking global macroeconomic trends. This ETF aims to closely follow a carefully curated selection of indicators, economic data, and market signals to provide investors with exposure to various macroeconomic themes. By employing a deep tracking approach, DEEP seeks to offer investors insights into global economic trends, making it an intriguing option for those looking to align their investments with broader macroeconomic shifts and navigate the complexities of the global financial landscape.
Roundhill Investments employs a meticulous investment strategy through its fund that is designed to mirror the performance of the Acquirers Deep Value Index, a distinct and carefully curated index established in 2020 by Acquirers Funds, LLC. This index is renowned for its focus on fundamentally sound yet undervalued stocks, selecting the top 100 from the smallest 75% of U.S. listed companies based on market capitalization, while ensuring they meet specific liquidity requirements. Excluding business development companies, the index leverages The Acquirer’s Multiple®—a valuation metric introduced by Tobias Carlisle in 2014—to identify stocks that are potentially undervalued. The selection process is rigorous, involving a holistic valuation of assets, earnings, and cash flows, alongside a thorough analysis for any signs of fraud, earnings manipulation, and financial distress. Furthermore, it incorporates a threefold margin of safety evaluation and a forensic-accounting review to ensure the financial integrity and sustainability of the selected companies. The fund aims to replicate the index’s composition as closely as possible, using either a direct replication strategy or a representative sampling strategy when necessary, to achieve its investment objective while adapting to practical constraints and maintaining alignment with the index’s industry concentration levels.
The DEEP SECTOR ETF primarily focuses on the energy sector, with a substantial allocation of its assets towards oil, gas, and renewable energy companies. This sector exposure allows investors to gain exposure to the global energy market, benefiting from potential commodity price fluctuations and renewable energy growth. However, it's important to note that the energy sector can be highly volatile, influenced by geopolitical events and fluctuations in energy demand, making DEEP SECTOR ETF suitable for investors with a higher risk tolerance.
The exposure provided by Roundhill Investments through its alignment with the Acquirers Deep Value Index offers investors a unique opportunity to tap into the potential of undervalued, fundamentally robust companies within the U.S. stock market. By concentrating on the most undervalued stocks from the smaller 75% of U.S. listed entities, the fund targets those hidden gems that are often overlooked by mainstream investment strategies. This focus not only diversifies an investor's portfolio but also introduces a level of risk management through the fund's stringent selection criteria, which includes a comprehensive evaluation of financial health, earnings quality, and the presence of a safety margin in valuation. The quarterly reconstitution and rebalancing of the index ensure that the fund remains aligned with its core investment philosophy of capturing deep value, making it an attractive option for those looking to invest in the potential for significant returns from market segments that exhibit strong fundamentals yet are priced below their intrinsic value. This approach to investment offers a nuanced exposure to deep value equities, potentially serving as a hedge against market volatility and a source of long-term growth.
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5 min readCompare the IHF and XLV ETFs with our thorough analysis. Dive into the performance metrics, underlying assets, and investment strategies.
4 min readThe DBB ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
4 min readThe FMHI ETF (Future Medical and Healthcare Innovations ETF) is an investment fund dedicated to companies driving groundbreaking advancements in the medical and healthcare industries. This ETF offers investors exposure to innovative technologies, biotech research, and healthcare solutions that have the potential to shape the future of medical treatment and patient care. With the healthcare sector constantly evolving, the FMHI ETF presents an attractive opportunity for those seeking to invest in the cutting-edge of medical innovation.
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