The new VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO) is a new ASX fund with an index that has delivered 37% a year over the past 5 years.
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The VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO) is a relatively new addition to the ASX share market. It only launched in early September last year, after all. But this exchange-traded fund (ETF) has already made a decent start, adding more than 10% to its value since its launch.
Perhaps more tantalising for investors is the performance of the index that ESPO tracks. According to VanEck, this ETF mimics the MVIS Global Video Gaming and eSports Index. The index “comprises companies involved in video game development, eSports, and related hardware and software globally”, and evidently does so with great success, seeing as it has reportedly returned an average of 37.17% per annum over the past 5 years.
We don’t have to look too far to understand why this ETF has amassed close to $100 million in assets under management in almost 8 months. So what does this ETF really look like under the hood? Let’s take a look.
A closer look at ESPO
The Video Gaming and eSports ETF holds a relatively concentrated basket of gaming and eSports shares — 25 at the current time. The fund’s current top holding is NVIDIA Corp (NASDAQ: NVDA). NVIDIA is a popular US company that mostly designs and manufactures graphics hardware.
Other holdings that investors might be familiar with include Nintendo Co Ltd, Tencent Holdings Ltd, Activision Blizzard Inc (NASDAQ: ATVI) and Take-Two Interactive Software Inc (NASDAQ: TTWO).
Nintendo is the famous Japanese gaming company behind the gaming characters Mario, Donkey Kong, Pokemon and Zelda. It is also famous for its gaming consoles like the Wii, the old GameBoy, the Nintendo DS and the Nintendo Switch.
Tencent is the Chinese gaming behemoth that is perhaps most famous in Australia for its Fortnite game, although it owns a portfolio of popular Chinese social media and eSports apps like WeChat as well.
Activision Blizzard is the company behind some of the most popular gaming franchises in the world, like World of Warcraft and Call of Duty. Similarly, Take-Two is known for well-known franchises like Grand Theft Auto and Red Dead.
As you might have gathered, the ESPO ETF is relatively well balanced from a geographical perspective — 38.5% of its holdings are US companies, with Japan (21.1%), China (18.4%) and Singapore (6.6%) also well represented.
Finally to note, the VanEck Vectors Video Gaming and eSports ETF charges a management fee of 0.55%. That would equate to $5.50 per year for every $1,000 invested.
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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Activision Blizzard and NVIDIA. The Motley Fool Australia has recommended Activision Blizzard and NVIDIA. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.