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BetaShares levels up with new video game ETF
The launch of the new ETF follows a number of major deals within the gaming industry recently.
BetaShares levels up with new video game ETF
The launch of the new ETF follows a number of major deals within the gaming industry recently.
BetaShares on Wednesday (9 February) launched its Video Games and Esports ETF (ASX: GAME) to offer Australian investors exposure to global video gaming and e-sports companies.
With the lack of games companies listed locally, BetaShares director of adviser services Blair Modica told nestegg that GAME was a potential source of portfolio diversification for investors who are interested in the sector.
“It’s our view that the video gaming and e-sports sector is a long-term thematic play that is anticipated to have decades of growth ahead,” he said.
Mr Modica explained that investors were generally recommended to consider thematic funds such as GAME for the satellite component of their portfolio.
“This means an investor may look to build their portfolio core around broad exposure to Australian and international equities or other assets via an ETF like our Australian 200 ETF or our Nasdaq100 ETF,” he said.
“A thematic fund like GAME can then be used to tilt the portfolio towards high conviction megatrends like video gaming.”
The launch of the ETF follows a number of major deals in the video game industry in recent weeks, including Sony’s US$3.6 billion takeover of Bungie, Take-Two Interactive’s US$12.7 billion purchase of Zynga and Microsoft’s US$68.7 billion acquisition of Activision Blizzard.
“It is no accident that household names are seeking to expand their presence in this industry as they seek to capitalise on the predicted growth in revenues, player numbers and profit margins,” said Mr Modica.
“Global names such as Microsoft, Sony and Take-Two Interactive have all upped their exposure to the sector as more people use video games to stay connected with their friends and keep themselves entertained.”
Research highlighted by BetaShares indicates that the video games sector now generates more revenue than the global movie industry and North American sports industry combined and is tipped to grow from US$176 million in 2021 to approximately US$219 billion by 2024.
“On the back of this growth, it is expected that industry revenue, profit margins, and the number of global players are all forecast to increase in the coming years,” Mr Modica said.
GAME will join a small number of ETFs in the space that is accessible to local investors, most notably the ASX-listed VanEck Video Gaming and eSports ETF.
“We believe that GAME is the best way for investors to access the full potential of the video gaming and esports sector,” said Mr Modica.
“The index underpinning GAME contains 50 leading video gaming and esports companies giving investors exposure to not only the global leaders in the space, but also next generation companies in the growing industry.”
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