Are Investors Game for Gaming ETFs? | ETF Trends

Historically, baseball has been dubbed as America’s greatest pastime–is gaming, also known as “e-sports,” challenging for that moniker? Gaming is exploding in popularity, but are investors on board?

If so, this could only add more strength to funds like the Wedbush ETFMG Video Game Tech ETF (GAMR).

GAMR seeks to provide investment results that correspond generally to the price and yield performance of the EEFund Video Game Tech Index, which tracks the performance of the common stock of exchange-listed companies across the globe that are actively engaged in a business activity supporting or utilizing the video gaming industry.

“Work from home has clearly benefited many companies in the GAMR ETF due to more free time being spent playing games,” says Michael Pachter, ETFMG Video Game Tech Expert and Managing Director of Equity Research at Wedbush Securities. “We were pleasantly surprised to see several companies in the Index capitalize on the trend and overcome difficult obstacles, with GameStop as a standout performer as the company took advantage of increased ecommerce share and balance sheet efficiencies to largely eliminate its debt and reassure investors that it will benefit from console launches in the fall.”

GAMR Chart

GAMR data by YCharts

Passing the Billion Dollar Level

2020 hasn’t been the year of fun and games, but try and tell that to the VanEck Vectors Video Gaming and eSports ETF (NasdaqGM: ESPO), which crossed $1 billion in assets recently. Amid social distancing measures thanks to the pandemic, video gaming has come to the forefront even more as a past time whether it’s for recreational purposes or professional competition.

ESPO tracks the performance of the global video gaming and eSports (also known as electronic sports) segment. Per a recent press release, the fund’s assets “represent the collective total in the VanEck Vectors Video Gaming and eSports ETF (Nasdaq: ESPO), the first pure-play ETF of its kind, launched in 2018, and the European version of the strategy, the VanEck VectorsTM Video Gaming and eSports UCITS ETF which launched in 2019. The relatively new strategy has reached this significant asset threshold in under three years of trading, a testament to the popularity of the space and the targeted exposure offered by these vehicles.”

“Consumer preferences are evolving towards online and digital streaming entertainment,” said Ed Lopez, Managing Director, Head of ETF Product at VanEck. “While we couldn’t have anticipated the stay-at-home mandates of 2020, we believe the pandemic has accelerated a number of long-term trends, as evidenced by the video gaming industry hitting $159 billion in projected revenues for 2020.1

“We’ve seen great adoption and interest from both individuals and financial professionals in Europe, demonstrating recognition of video gaming and esports as a big and growing business and its global appeal,” added Martijn Rozemuller, Managing Director, Head of Europe at VanEck.

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