The VanEck Vectors Gaming ETF (NYSEArca: BJK), the only ETF dedicated to gambling and casino stocks, is up an impressive 26.1% year-to-date.
Favorable seasonal trends indicate BJK and some of the ETF’s marquee holdings could see more upside in the fourth quarter.
BJK follows the MVIS Global Gaming Index, “which is intended to track the overall performance of companies involved in casinos and casino hotels, sports betting, lottery services, gaming services, gaming technology and gaming equipment,” according to VanEck.
“According to data from Schaeffer’s Senior Quantitative Analyst Rocky White, BJK has been one of the best-performing ETFs in October, looking back over the past 10 years’ worth of data,” according to Schaeffer’s Investment Research. “Specifically, the shares have averaged a monthly return of 2.35%, and have been positive 67% of the time since they began trading in 2008. Based on the fund’s current perch, a move of this magnitude would put the shares near $43.10 for the first time since December 2014.”
Las Vegas Sands (NYSE: LVS) and Wynn Resorts (NASDAQ: WYNN) are dominant names in Las Vegas but the companies, two marquee holdings in BJK, are also big players in Macau, levering each to Chinese gambling trends. Those two stocks are top 10 holdings in BJK, combining for 12.5% of the ETF’s roster.
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The ETF allocates 37.3% of its weight to U.S. stocks with Australia and China combining for a quarter of the fund’s weight.
“Wynn Resorts is one of BJK’s top holdings, and the shares have been flying up the charts in 2017. Year-to-date, WYNN stock has added a noteworthy 69.3%. More recently, the security pulled back briefly after hitting a two-year high of $147.90 one week ago, but found a quick floor at its 30-day moving average — a trendline that served as support earlier this year — and was last seen trading at $146.50,” notes Schaeffer’s.
Some industry analysts see opportunity with Macau stocks. Macau is the only Chinese territory where gambling is legal. The city is trying to rebuild its market with shops, restaurants, entertainment shows and other non-gaming attractions to bring in more middle-class tourism.
The $23.4 million BJK holds 40 stocks. BJK resides 11.5% above its 200-day moving average after hitting a 52-week high last Friday.
For more information on the ETF market, visit our ETF performance reports category.