ESPO - VanEck Video Gaming & eSports ETF

[Dona Ferentes]

ESPO was admitted to the ASX in September 2020. Currently has about $120million in funds under management. Management fee of 0.55%pa.

The fund gives investors exposure to a diversified portfolio of 25 companies in the global Video Gaming & eSports sector. The fund aims to provide investment returns before fees and other costs which track the performance of the Index.

 

[qldfrog]

ESPO was admitted to the ASX in September 2020. Currently has about $120million in funds under management. Management fee of 0.55%pa.

Do you know if it is edged? I assume it is mostly us stocks?

 

[Dona Ferentes]

ESPO - ESPO - VanEck Video Gaming and Esports ETF | Holdings

ESPO gives investors exposure to a diversified portfolio of 25 companies in the global Video Gaming & eSports sector. ESPO aims to provide investment returns before fees and other costs which track the performance of the Index.

www.vaneck.com.au

 

[Ann]

...and the chart looks like a pack of gamers are treating this as one of their games. I looked at it recently and went yeah nah, not for me! Mind you for a short term punter, quick money could be made. It may even become painfully predictable, overbought, oversold, overbought, oversold so on and on, fun to watch.

 

[Dona Ferentes]

Do you know if it is hedged? I assume it is mostly us stocks?

Not hedged .
Surprisingly quite a few non-US companies. From some blurb: The ETF gives investors exposure to many of the largest companies involved in video game development, eSports, and gaming related hardware and software.

Among the companies you’ll be owning are game developers Activision Blizzard, Roblox, Take-Two, and Electronic Arts, and graphics processing unit (GPU) developer Nvidia. VanEck notes that the increasing popularity of video games and eSports means that these companies are well-placed to benefit.

One of the companies in the fund is Roblox. It is the game developer behind the eponymous Roblox online metaverse platform and game creation system. It has 50 million daily active users, which are generating significant recurring revenues for the company.

 

[Dona Ferentes]

I run a tech ETF watchlist, with the usual suspects. Don't hold any, by the way. With the tech rout continuing, all are down today apart from ESPO, which is up 2%, likely on news of a major acquisition

Microsoft agreed to buy Activision Blizzard in a $US68.7 billion ($96 billion) deal, uniting two of the biggest forces in video games to create the world’s third-biggest gaming company. In its largest purchase ever, Microsoft will pay $US95 a share in cash for one of the most legendary gaming publishers, known for titles including Call of Duty and World of Warcraft

 

[Dona Ferentes]

Microsoft said the Activision deal will vault it to No. 3 in the gaming industry, behind China’s Tencent Holdings and Japan’s Sony. (but ... this will skew the index, or the ETF if not included??)

Founded in 1979, Activision is home to some of the most popular game franchises in the world, including Candy Crush, Guitar Hero, Skylanders, Destiny, Crash Bandicoot and the Tony Hawk skateboarding titles. Its Call of Duty franchise is arguably Activision Blizzard’s most important business. In 2020, the company’s Activision segment – nearly all of which is Call of Duty – accounted for 55 per cent of the company’s operating profit.

Driving Microsoft’s ambition is its Game Pass subscription service, which gives members access to all of its first-party games – those from the studios it owns – for no extra charge, and on the day of their commercial release. Recently, it has added titles from other publishers, such as Electronic Arts, but owning the underlying developers gives Microsoft the freedom to keep the most popular titles from competing platforms, such as the PlayStation.

Microsoft is also banking on the rise in mobile gaming, the fastest-growing part of the industry and one of the software giant’s weak spots. Earlier this month, Take-Two Interactive Software agreed to buy mobile game maker Zynga in a deal valued at $US11 billion to help the publisher of Grand Theft Auto break into the market for smartphone games.

 

[Dona Ferentes]

I run a tech ETF watchlist, with the usual suspects. Don't hold any, by the way. With the tech rout continuing, all are down today apart from ESPO, which is up 2%, likely on news of a major acquisition

and like many, ESPO has slumped through the year.

There's an article, a promo, in the AFR today about some fund manager running PAC Global eSports Fund with the attendant claim of discovering the secret sauce, and he's up 14%, attracting family office money, etc etc. The manager breaks down the eSports market into four main pillars: hardware, software, teams and games producers.

• Hardware can be headsets, keyboards, laptops, etc
• And of course software is just data gathering to sell to betting agencies
• Teams are getting organised. There are celebrities, events, sponsorship, (and of course the sought-after 'younger demographic')
• Gaming studios such as Activision Blizzard, Microsoft, Electronic Arts and Nintendo have been pumping out games for years.