Roundhill Reaches $1B AUM Milestone

Roundhill Investments, the themes-focused exchange-traded fund issuer, has amassed $1 billion in assets following the rapid growth of its A.I.-focused funds. 

The six-year-old New York-based firm, which provides exposure to the metaverse, cannabis, and sports betting, announced Thursday that it had reached the $1 billion milestone across its 14 trading ETFs. The firm has doubled the number of funds in its lineup over the past year. 

"We're really excited to hit that $1 billion threshold," said Roundhill CEO Dave Mazza. "But we're not stopping there," he added, explaining that the firm is looking to diversify not just the themes it launches, but structure too. The firm recently launched its first covered call funds in March. 

The Roundhill Magnificent Seven ETF (MAGS) and the Roundhill Generative AI and Technology ETF (CHAT), which both heavily invest in A.I.-fueled tech companies, have grown the most over the past year, according to the company. MAGS net inflows have reached $225 million, while CHAT has brought in $70 million. 

The rapid acceleration of artificial intelligence, including the release of consumer-facing products such as ChatGPT, has made AI one of the past year's overarching investment themes. A.I.-focused ETFs brought in billions as chipmaker Nvidia soared 239% over the course of 2023, and the so-called Magnificent Seven gained 106% over last year. 

Roundhill's largest fund is the $408 million Roundhill Ball Metaverse ETF (METV), followed by MAGS and the Roundhill Sports Betting and iGaming ETF (BETZ). 

While betting big on popular themes can attract investors, the strategy can be risky when the trends lose popularity. For example, the firm’s Roundhill MEME ETF (MEME) shuttered last November after failing to attract significant assets. 

Mazza explained that this dynamic has contributed to Roundhill's view that quality beats quantity when it comes to new funds. "We’ve limited our number of launches because there is an opportunity to have more conviction in the funds we do launch,” he said. 

Mazza Assumes CEO Role 

The accumulation of assets also comes as Roundhill changed its leadership. Last month, the firm appointed Mazza to the top executive role, barely a year after he joined the firm as chief strategy officer. Roundhill told etf.com in an interview that the firm was looking to expand into other potentially hot themes, including an ETF focused on exposure to firms that are developing novel weight loss medications.

Contact Lucy Brewster at [email protected].