The new ETF will try to take advantage of the growth potential of these companies partnered with major sports leagues and encompass market exposure in several sectors, including consumer discretionary, information technology, financials, energy and health care.
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FANZ may also be seen as a type of value play as the large-cap components involved in these sports deals typically have enough free cash flow to afford a league sponsorship or broadcasting rights. According to PwC’s Sports Outlook, in North American sports, the media rights alone are expected to increase by 5.5% to $21.3 billion through 2020 and sports sponsorship are anticipated to rise 3.9% to $18.7 billion on a compound annual growth rate.
“Following the investment strategy of the famed portfolio manager Peter Lynch, who said, ‘invest in what you know,’ sports fans now have the opportunity to invest in a diversified portfolio of brands that they recognize in one fund. Our research demonstrates that the typical avid sports fan is a financially responsible individual that has disposable income to spend on sports merchandise, tickets, and TV packages. FANZ seeks to provide them with access to capture the growth opportunities presented by these companies,” Jim Kozimor, co-founder and chief strategy officer of SportsETFs and announcer with the NBC Sports Group, said in a note.
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