How a Gaming Boom Has Led to HEROic Gains for This ETF

HERO experienced gains of over 90% the past year, which ousted broad market indexes like the S&P 500 by a wide margin. This speaks to the rise in video gaming activities amid social distancing measures.

“Several sectors of the global economy like tourism, travel, restaurants, automobile as well as oil and gas have bore the brunt of the pandemic,” a TRT World article elucidated, explaining the video gaming industry’s subsequent rise amid the chaos.

“And the video game industry, which was already on the rise pre-pandemic has seen an exponential rise during the past year and reportedly outgrown its film counterpart,” the article added.

HERO seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Video Games & Esports Index. The fund invests at least 80% of its total assets in the securities of the underlying index and in American Depositary Receipts (‘ADRs’) and Global Depositary Receipts (‘GDRs’) based on the securities in the underlying index.

The underlying index is designed to provide exposure to exchange-listed companies that are positioned to benefit from increased consumption related to video games and esports.

With the lockdowns taking place globally, gamers fired up their consoles and opened their wallets. 2020 saw an exponential rise in video game sales thanks to the pandemic.

“Global videogame revenue is expected to surge 20% to $179.7 billion in 2020, according to IDC data, making the videogame industry a bigger moneymaker than the global movie and North American sports industries combined,” a MarketWatch report said. “The global film industry reached $100 billion in revenue for the first time in 2019, according to the Motion Picture Association, while PwC estimated North American sports would bring in more than $75 billion in 2020.”

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