VanEck’s new eSports ETF, which is at the final stages of approval, has created a video game and eSports ETF to capture the upside of the growing market.
Investors would own shares in companies that generate at least 50 per cent of their revenue from video games or eSports.
VanEck’s managing director and head of Asia Pacific, Arian Neiron, believes COVID-19 will be a strong tailwind for investors.
“With the coronavirus pandemic sweeping the globe and people confined to their homes in many nations now and into the foreseeable future, eSports and interactive video gaming will become an increasingly important form of entertainment,” said Mr Neiron.
Mr Neiron also points to the size of the current market, which is far greater than investors would expect.
“Not many people realise there are 2.7 billion gamers globally – that is more than Facebook users, Apple devices and Netflix subscribers,” he said.
The ETF provider noted that the eSports and video gaming industry is growing faster than robotics and cyber security, with investors able to cash in.
“Since 2015, video game revenues have seen an annualised growth rate of 13 per cent, and it has been estimated that by 2023, video game revenues should hit US$200 billion.
“Those are exciting growth forecasts, and ESPO will offer investors the ability to access this potential growth by investing in these innovative companies and their market captivating games,” Mr Neiron explained.
The company’s ETF would allow investors to own holdings, including leading game publishers Tencent, Nintendo, Electronic Arts and Activision Blizzard, which have the potential to continue to grow their revenues at strong rates.
The ETF will also invest in related software developers, streaming services and companies involved in eSports events. Revenue requirements ensure targeted exposure to video gaming and eSports companies.
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