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First Trust recently filed for an ETF called The First Trust S-Network Streaming & Gaming ETF. The fund looks to tap one of the burgeoning spaces of the current era. Let’s delve a little deeper:
Inside the Proposed ETF
The First Trust S-Network Streaming & Gaming ETF looks at investment results that correspond generally to the price and yield of the S-Network Global Streaming & Gaming Index. The expense ratio of the fund is yet to be disclosed.
The index consists of common stocks and depositary receipts issued by U.S. and non-U.S. companies that enable remote users to access online content, publish online content as well as that offer the products, services and technology that are required for the streaming and gaming industries.
The proposed fund targets three business segments, per the filing:
1.Content Streaming (companies that offer platforms for user-created content; companies that provide access to studio-created video content; companies that deliver access to studio-created audio content)
2.E-Sports (companies that design and develop video games; companies that enable professional gamers to compete in online competitions; companies that allow spectator services for online gaming)
3.iGaming (companies that permit remote participation in prospective wagering)
How Does That Fit in a Portfolio?
Video gaming and e-sports were winning areas amid the pandemic as the social distancing mandates forced people to indulge in the entertainment at home. The trend is still alive and kicking, indicating its durability in the post-pandemic era as the outbreak has changed the lifestyle and preferences of global population to a large extent.
Going by data from The NPD Group, the video game industry, including packaged media, digital, consoles and accessories, hit a record sales of $4.6 billion in February, up 35% year over year.New consoles from Microsoft’s Xbox platform and Sony Interactive Entertainment’s PlayStation 5 have led to the sales surge apart from COVID-induced isolation trends.
Notably, Nintendo’s Switch game unit outsold the PS5 in February, with unit sales and revenues competing with the 2009 debut of the Nintendo Wii. Year to date, spending is up 39% to $9.31 billion (read: Video Gaming ETFs to Win as Sales Keep Rising Amid Pandemic).
Then comes streaming, which is another pandemic beneficiary and people are now habituated with this trend. The growing popularity of online gaming and esports tournaments will continue to boost the industry. The rise in tech-savvy population and growing urbanization are the factors behind the recent surge in the industry.
The live streaming market is likely to reach $247.27 billion by 2027 having grown at a CAGR of 28.1%, while Media & Entertainment is expected to be the topmost end-user industry that is projected to expand at a CAGR of 28.3%. User penetration will be 14.3% in 2021 and is expected to touch 18.2% by 2025, per Statista.
Will the New Fund See Success?
The competition in the field is not fierce. Roundhill Streaming Services & Technology ETF , which charges 75 bps in fees, is a competition while The Sports Betting ETF (BETZ - Free Report) , The Esports ETF (NERD - Free Report) , Global X Video Games & Esports ETF (HERO - Free Report) and VanEck Vectors Video Gaming and eSports ETF (ESPO - Free Report) are some of the video gaming ETFs that could pose threats to the fund.
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Another Streaming and Gaming ETF in the Making
First Trust recently filed for an ETF called The First Trust S-Network Streaming & Gaming ETF. The fund looks to tap one of the burgeoning spaces of the current era. Let’s delve a little deeper:
Inside the Proposed ETF
The First Trust S-Network Streaming & Gaming ETF looks at investment results that correspond generally to the price and yield of the S-Network Global Streaming & Gaming Index. The expense ratio of the fund is yet to be disclosed.
The index consists of common stocks and depositary receipts issued by U.S. and non-U.S. companies that enable remote users to access online content, publish online content as well as that offer the products, services and technology that are required for the streaming and gaming industries.
The proposed fund targets three business segments, per the filing:
1.Content Streaming (companies that offer platforms for user-created content; companies that provide access to studio-created video content; companies that deliver access to studio-created audio content)
2.E-Sports (companies that design and develop video games; companies that enable professional gamers to compete in online competitions; companies that allow spectator services for online gaming)
3.iGaming (companies that permit remote participation in prospective wagering)
How Does That Fit in a Portfolio?
Video gaming and e-sports were winning areas amid the pandemic as the social distancing mandates forced people to indulge in the entertainment at home. The trend is still alive and kicking, indicating its durability in the post-pandemic era as the outbreak has changed the lifestyle and preferences of global population to a large extent.
Going by data from The NPD Group, the video game industry, including packaged media, digital, consoles and accessories, hit a record sales of $4.6 billion in February, up 35% year over year.New consoles from Microsoft’s Xbox platform and Sony Interactive Entertainment’s PlayStation 5 have led to the sales surge apart from COVID-induced isolation trends.
Notably, Nintendo’s Switch game unit outsold the PS5 in February, with unit sales and revenues competing with the 2009 debut of the Nintendo Wii. Year to date, spending is up 39% to $9.31 billion (read: Video Gaming ETFs to Win as Sales Keep Rising Amid Pandemic).
Then comes streaming, which is another pandemic beneficiary and people are now habituated with this trend. The growing popularity of online gaming and esports tournaments will continue to boost the industry. The rise in tech-savvy population and growing urbanization are the factors behind the recent surge in the industry.
The live streaming market is likely to reach $247.27 billion by 2027 having grown at a CAGR of 28.1%, while Media & Entertainment is expected to be the topmost end-user industry that is projected to expand at a CAGR of 28.3%. User penetration will be 14.3% in 2021 and is expected to touch 18.2% by 2025, per Statista.
Will the New Fund See Success?
The competition in the field is not fierce. Roundhill Streaming Services & Technology ETF , which charges 75 bps in fees, is a competition while The Sports Betting ETF (BETZ - Free Report) , The Esports ETF (NERD - Free Report) , Global X Video Games & Esports ETF (HERO - Free Report) and VanEck Vectors Video Gaming and eSports ETF (ESPO - Free Report) are some of the video gaming ETFs that could pose threats to the fund.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>