Roundhill Targets Six Largest US Banks with “BIG” ETF

Roundhill Investments has launched a new exchange-traded fund (ETF), Roundhill Big Bank ETF (BIGB) providing focused exposure to the largest and most liquid US bank stocks.

The ETF carries an expense ratio of 0.29%. The fund will employ an equal weighting, rebalance on a quarterly basis and reconstitute on an annual basis.

Instead of tracking a large, diversified basket of companies within the banking sector, BIGB provides more targeted exposure to the six largest US banks: Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo.

The collapse in regional bank shares may be offering an opportunity for investors to consider an allocation to larger banks. All six banks in the fund are Global Systemically Important Banks (GSIBs) which are required to carry higher capital ratios than non-GSIBs, making them a potentially safer investment amid stress in the banking system.

“In the wake of banking failures at Silicon Valley Bank, Signature Bank of New York, and Silvergate, individuals and institutions alike are migrating banking relationships to the institutions deemed too big to fail,” said Dave Mazza, Chief Strategy Officer at Roundhill.

In addition to the launch of BIGB, Roundhill plans to introduce BIGT, BIGA, and BIGD to its suite of BIG ETFs in the coming weeks, targeting the largest companies in technology, airlines and defense, respectively.