🎮ESPO ETF: Powering Your Portfolio with Video Gaming & Esports

In today's digital age, with technology transforming every aspect of our lives, one sector has been gaining momentous traction – the video gaming and esports industry. With the rise of professional gaming leagues, massive tournaments, and a global community of passionate fans, it's no surprise that savvy investors are keen to tap into this burgeoning market. Enter the ESPO ETF: a gateway to the top companies powering the video gaming and esports world.

What is ESPO?

The VanEck Vectors Video Gaming and eSports ETF (ESPO), launched in October 2018, is meticulously crafted to track the MVIS Global Video Gaming and eSports Index. This index represents companies deeply entrenched in video game development, esports, and related hardware and software domains.

Managed by VanEck, ESPO offers investors a strategic gateway into the pulsating world of the video gaming and esports industry, spanning across multiple countries, including the U.S. (33%), Japan (23%), China (18%), Taiwan (8%), South Korea (6%), Poland (4%), Sweden (3%), and France (3%). The ETF holds a portfolio of 25 large-cap stocks, with its top holdings comprising 61% of the assets. Through ESPO, investors can tap into the expansive spectrum of companies specializing in video game development, streaming services, game-centric hardware, and the ever-evolving realm of professional esports leagues.

Why Video Gaming & Esports?

The global video gaming market has seen explosive growth, with a generation of gamers transitioning from casual play to viewing and following professional esports leagues, much like traditional sports fans. This shift is driving revenues in sectors from game development to advertising and even physical merchandise.

The video game & esports market size is expected to grow from $205 B in 2022 to $346 B in 2030. This represents a compound annual growth rate (CAGR) of 8.9%. The growth of the market is being driven by a number of factors, including the increasing popularity of live streaming, the growth of mobile gaming, and the rising number of esports tournaments and events.

Top Holdings of ESPO

As in September 2023, top 6 weighted companies on ESPO ETF are:

1. Tencent Holdings Ltd: a Chinese tech giant, pioneering innovations in gaming, social media, and a plethora of digital services that have reshaped modern-day communication and entertainment.

2. Nvidia Corp is a trailblazing tech powerhouse, renowned for its cutting-edge graphics processing units (GPUs) that have revolutionized gaming, artificial intelligence, and high-performance computing.

3. Advanced Micro Devices Inc (AMD) is a global powerhouse in semiconductor design, known for its cutting-edge computing processors and high-performance graphics technologies.

4. Activision Blizzard Inc is a gaming juggernaut, renowned for producing some of the world's most popular video games and franchises, including "Call of Duty" and "World of Warcraft."

5. NetEase Inc. is a Chinese tech titan, delivering a myriad of online services ranging from gaming hits like "Rules of Survival" to innovative internet communication tools.

6. Nintendo is a Japanese multinational video game company and consumer electronics manufacturer headquartered in Kyoto, Japan. It is best known for its popular video game franchises, such as Mario, Zelda, Pokémon, and Super Smash Bros.

ESPO at a glance

Asset Class: Stocks

Underlying Index: MVIS® Global Video Gaming and eSports Index

Geographical Focus: Global, with a concentration on the top gaming and esports markets such as North America, Asia, and Europe.

Sector Focus: Primarily technology, including gaming software/hardware and esports operations.

Expense Ratio: 0.56% (as of last data point)

Dividend Yield: 0.76% (as of last data point)

Rebalancing Frequency: Quarterly

Listed On: NASDAQ

Historical Performance

The ESPO ETF tracks the gaming and esports industry, which has been growing rapidly in recent years. Like all investments, ESPO's past performance doesn't guarantee future results, but it has generally followed the upward trend of the industry. ESPO holds some of the biggest names in gaming and esports, which makes it a unique investment opportunity in the ETF market.

ETF Radar View

The radar chart below shows the general characteristics of the ETF:

_{*Expense of 2 means investing in ESPO is with relatively high cost.}

Top 3 Reasons to Invest in ESPO

1. Explosive growth potential: The video gaming and esports sectors have experienced consistent growth in recent years, and experts predict that this trend will continue.

2. Diversified portfolio: ESPO offers investors exposure to a wide range of companies in the gaming and esports industries, including software developers, hardware producers, and professional esports entities. This diversification helps to reduce risk and maximize potential returns.

3. Tapping into cultural shifts: Gaming and esports are becoming increasingly popular around the world, driven by factors such as the rise of mobile gaming and the growing popularity of live streaming. By investing in ESPO, investors can capitalize on these trends and position themselves for long-term success.

Top 3 Reasons Not to Invest in ESPO

1. Sector volatility: The tech sector, including gaming, can be volatile, meaning that stock prices can fluctuate rapidly. This volatility can be caused by a variety of factors, such as technological advancements, market competition, and economic conditions.

2. Regulatory concerns: As esports gains popularity, there is a growing risk of government regulation. This could include laws that limit the advertising of esports gambling or that restrict the participation of minors in esports competitions.

3. Overvaluation risks: The high growth potential of the gaming and esports industries has led to some investors overpaying for stocks in these sectors. This could lead to disappointing returns if the industry does not grow as quickly as expected.

Invest in the Future of Entertainment

The ESPO ETF offers a unique opportunity to invest in the growing gaming and esports industries. As these industries continue to grow and evolve, ESPO provides investors with a diversified portfolio of companies that are shaping the future of entertainment.

ESPO is not just a way to capitalize on the financial growth of the gaming and esports industries. It is also a way to support the companies that are creating new and innovative forms of entertainment. By investing in ESPO, you can be a part of the global phenomenon that is changing the way we consume and interact with entertainment.

DISCLAIMER: None of this is financial advice. This newsletter is 100% educational and is not investment advice to trade ETFs or any other assets or make financial decisions. Please be careful and do your research.