“The VIDG ETF seeks to capitalize on a wide range of possible outcomes. Its portfolio reflects the full range of potential winners, from eSports and video games specialists, to media companies and hardware producers,” according to Defiance ETFs.
VIDG debuts at a time of massive growth expectations for the global video game market.
“The video games market will more than double to become a $300bn-plus industry by 2025, according to GlobalData,” a leading data and analytics company. “According to the company’s latest thematic report, Video Games, the market will grow from $131bn in 2018 to $305bn in 2025, at a compound annual growth rate (CAGR) of 13%.”
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Over 76% of VIDG’s weight is allocated to video game makers, but the fund features some exposure to console manufacturers and esports names. The U.S., Japan and China combine for nearly three-quarters of the new ETF’s geographic exposure. VIDG could also be a viable play on the booming mobile gaming market.
Evolving technologies, such as 5G and cloud computing, are expected to play significant roles in the expansion of mobile gaming.
“Mobile gaming has already outstripped the console games and personal computer (PC) games markets,” according to Global Data. “Over the coming years, with the increased maturity of cloud gaming technology (supported by 5G), more gamers will shift towards mobile gaming platforms, driving the expansion of this market to over $100bn by 2022, up from $55bn in 2018.”
VIDG charges 0.30% per year, or $30 on a $10,000 investment. That is less than 0.40% charged by AUGR, making VIDG the second-cheapest of the four dedicated video game ETFs on the market.
For more ETF launches, visit our Thematic Investing Channel.