The thematic ETF has had an up and down life. Many an ETF investor can name their favorite thematic strategy, and certainly, the space includes some eclectic options. That being said, however, investors may not want to ignore all thematic strategies outright. The thematic ETF world includes some strategies that could appeal to a broader investing audience that merit a closer look, like the VanEck Video Gaming and eSports ETF (ESPO ).
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The fund launched back in 2017. Charging 56 basis points, ESPO tracks the MVIS Global Video Gaming & eSports index. The video game ETF’s index includes fewer than 30 market-cap-weighted firms in gaming, hardware, software, and betting.
Like its many thematic ETF siblings, ESPO provides a strong representation of video game companies. For example, ESPO holds names like Take-Two Interactive Software, Inc. (TTWO) at a 4.5% weight. TTWO, a holding company, owns three publishing labels responsible for huge franchises including Grand Theft Auto.
What makes it stand out, however, is its performance. The strategy has performed reasonably well over the last five years, returning 7.7% over five years, per YCharts. Its performance over the last three months stands out particularly. ESPO has returned 19.4% in that time.
The ETF’s performance also owes to the strength of names like Advanced Micro Devices (AMD). AMD has returned 53.1% over the last year, per YCharts, with the firm designing digital semiconductors for gaming PCs and consoles as part of its remit.
Thematic ETFs take advantage of ETFs’ transparency and ability to craft specific, honed exposures. ESPO has gathered more than $250 million in AUM since launching seven years ago. In a broader portfolio, the fund can layer in on top of a core exposure to provide potential for additional returns. For those investors looking for ideas in thematic, this ETF may appeal.
For more information, please visit VettaFi.com | ETF Trends.
