Roundhill files ETFs for enterprise software, oil refiners and tankers

Roundhill ETF Trust filed on Friday, Nov. 6, for three stock funds that do not yet trade. The trust used two prospectuses, both marked subject to completion.

The software prospectus is for one fund, the Roundhill Enterprise Software ETF, and leaves the ticker blank. The oil prospectus covers two funds, the Roundhill Oil Refiners ETF, RFNR, and the Roundhill Oil Tankers ETF, VLCC.

The trust proposed that the filings become effective 75 days after they were filed, which would be Jan. 20, 2027, the earliest they could take effect. The covers say the shares may not be sold until the registration statement is effective. None of the funds has started operating, and the listing exchange is a blank line on all three.

Each fund would be actively managed. Roundhill Financial Inc., the adviser, would choose the stocks rather than track an index.

The management fee on each is printed as 0.\\%, a placeholder, not a zero. The line for total annual fund operating expenses is the same blank. Distribution and service fees are shown as 0.00%, and other expenses are estimated at 0.00%, because Roundhill would pay the funds' ordinary operating costs.

Roundhill already runs funds that trade, including the Roundhill Magnificent Seven ETF, MAGS. The firm says it was founded in 2018 and offers thematic stock funds, options-income funds and trading funds.

Friday's filings do not change those funds. On Oct. 30 the trust filed for another new series, the Roundhill Cybersecurity ETF, and left that fee blank too.

Enterprise software

The software fund would seek capital appreciation. Under normal circumstances it would invest at least 80% of its net assets in enterprise-software companies. Roundhill would treat a company as qualifying if at least 50% of its revenue comes from software platforms that businesses use to run operations, manage data or build applications, and it would seek a market value of at least $5 billion at the time of purchase.

The iShares Expanded Tech-Software Sector ETF, IGV, reported net assets of $12.4 billion as of Friday, and iShares lists the expense ratio at 0.38% in the current prospectus. IGV tracks the S&P North American Expanded Technology Software Index, a mix of North American software companies and selected interactive-media firms, not enterprise software alone. Its share price was down 6.4% this year through Friday.

Oil refiners and tankers

The two oil funds would share their rules. Under normal circumstances, each would invest at least 80% of its net assets in the companies its name describes. Roundhill would look for firms with at least 50% of revenue in that business and would seek a market value of at least $1 billion at purchase.

Each would be non-diversified and would concentrate more than 25% of its assets in energy. The adviser would rebalance at least quarterly.

For refiners, that revenue can come from refining, wholesale sales of refined products, specialty products, or the pipelines, terminals and logistics tied to refining. Integrated oil and gas companies whose core business includes exploring for and producing crude and natural gas are excluded.

VanEck already offers refining companies in an index fund. The VanEck Oil Refiners ETF, CRAK, tracks the MVIS Global Oil Refiners Index. VanEck reported net assets of $663 million as of Nov. 3. A fee filing dated April 29 shows a net expense ratio of 0.61% and a gross ratio of 0.94%, with a waiver through May 1, 2027.

The tankers fund would own companies whose core business is owning and operating ships that carry crude oil and refined products. Its revenue screen counts owning, chartering or operating those ships, including tankers that move refined products.

The proposed ticker, VLCC, is the industry abbreviation for a very large crude carrier, a ship built to haul crude. The fund would not be limited to those ships.

Amplify already offers a tanker fund, and it does not own shipping companies. Amplify's Breakwave Tanker Shipping ETF, BWET, holds crude-oil freight futures. Amplify reported net assets of $97.3 million as of Friday and total annual expenses of 3.50%.

CRAK's share price was up 48% this year through Friday, and that return includes a drop of 11% over the five sessions through that day. BWET's share price was up 3,412% this year through Friday, and that return includes a drop of 30% over those same five sessions.

On Sept. 4, Robert Fullem wrote in Reuters that shares of global oil refiners had surged this year, boosted in part by supply disruptions related to the U.S.-Iran and Russia-Ukraine conflicts, but that technical analysis suggested the rally might be due for a pause.

CRAK and BWET already trade. Roundhill's oil funds could not take effect before Jan. 20.