The Global X Video Games & Esports ETF (NASDAQ: HERO) is higher by 45% year-to-date with the bulk of those gains being accrued in the second quarter, solidifying the notion that video game and esports ETFs are benefiting from shelter-in-place orders forced by the coronavirus.
HERO, which launched last October, “seeks to invest in companies that develop or publish video games, facilitate the streaming and distribution of video gaming or esports content, own and operate within competitive esports leagues, or produce hardware used in video games and esports, including augmented and virtual reality,” according to Global X.
HERO’s underlying index features 38 stocks from nine countries. The bulk of the new ETF’s top 10 holdings are video game publishers, but the fund has exposure to hardware makers and semiconductor manufacturers, among other industries, as well. Data confirm those are good places to be this year.
“According to data gathered by BuyShares.co.uk, the market capitalization of the six leading video games companies in the world jumped by $354.5bn between January and June. With a 28% growth in the total value of shares in this period, the Chinese IT giant Tencent has witnessed the most significant rise in market capitalization,” reports Buy Shares.
Plenty of HERO Help
With gaming benefiting on multiple fronts, including the stay-at-home theme forced by the Coronavirus pandemic as well as a slew of new titles from popular franchises, HERO, and its components are delivering for investors in 2020.
“Founded in 2008 by the merger of US gaming companies Activision and Blizzard Entertainment, Activision Blizzard generated $6.5bn in revenue last year. Statistics indicate the market capitalization of the California based gaming company best known for its famous game series Call of Duty, amounted to $45.33bn at the beginning of 2020. Since then, this figure jumped to $58.75bn, a $13.42bn rise between January and June,” according to Buy Shares.
Activision Blizzard is HERO’s fourth-largest holding at a weight of 5.66%. Other HERO components are contributing, too.
“Electronic Arts, an American video game company known for Battlefield series, FIFA Series, Medal of Honor series, NBA Series, and Star Wars series, also witnessed significant growth in the combined value of shares in the last six months. Statistics indicate that between January and June, the market cap of this gaming company jumped by $6.25bn, reaching $38.36bn last week,” reports Buy Shares.
The $124 million HERO allocates 5.32% of its weight to EA.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.