Thematic ETF specialist Amplify ETFs is launching the world’s first online brokerage ETF.
The Amplify Digital & Online Trading ETF (BIDS) will invest in discount online brokers like Robin Hood, digital asset companies like Coinbase, market makers like Virtu and request for quote platforms like MarketAxess.
To qualify in the index, companies must make 50% of their revenue from online brokerage, digital asset capital markets, trading platform technology, or market-making activities.
The fund charges 0.59% and using market weighting. The top 10 holdings are below.
Bernie’s commentary – a role call for the ETF industry
This is the first-of-a-kind as far as I’m aware. While the US has fintech ETFs (such as Global X’s FINX) and also has broker-dealer ETFs (such as iShares IAI) it doesn’t have an online trading ETF. The logic for launching this is clearly to piggyback off the momentum of Robin Hood, Coinbase and all the rest.
ETF industry professionals I suspect will be rooting for the companies in this fund, given their proximity to the ETF industry. Virtu and Flow Traders are obviously two of the biggest market makers. They’ve brought trading costs down and greatly improved efficiency. Although I admit that questions remain about Virtu’s payment for order flow practices with US brokers.
MarketAxess and TradeWeb – neither of them households names – have helped take the bond market out of the hands of the banks and been crucial for portfolio managing bond ETFs. Charles Schwab for its part is one of the world’s biggest ETF providers (often forgotten). While Coinbase is the custodian for crypto ETFs. And Interactive Brokers and Robin Hood are how countless retail investors access ETFs in the first place.
So for the sake of the ETF industry I hope this fund does well. And I’m sure it will.
This takes the concept of ETF of ETFs to a whole new level