The VanEck Vectors Video Gaming and eSports ETF (ESPO) is part of VanEck’s suite of niche and thematic funds. ESPO
tracks a market-cap weighted index of fewer than 30 companies involved in gaming and esports development, hardware, and software, including casinos and online betting. To make the cut, companies must derive at least half of their revenue from those businesses. ESPO charges a management fee of 55 basis points, which is pricey for passive funds but in line with other nice products.
ESPO’s portfolio is dominated by companies including NVIDIA, Tencent and Advanced Micro Devices, stocks commonly found in cheaper, diversified tech ETFs. U.S. equities account for more than a third of the portfolio, followed by Japan, China and South Korea.
Alternatives include the Global X Video Games & ESports ETF (HERO), which is a bit cheaper at 50 basis points. Like ESPO, HERO tracks an index of global firms that get more than half their revenue from video games and esports. But HERO, unlike ESPO, places caps on individual holdings, which keeps some of the larger companies from swamping the portfolio.