Investing in esports just got a lot easier

December 6, 2019

New York (CNN Business) Esports are filling basketball arenas, airing on major cable TV networks and attracting sponsorship dollars from blue chip companies. So it should come as no surprise that Wall Street is looking to cash in on the popularity of the ESL, Overwatch League, League of Legends World Championship and other esports events as well.

There are now several funds tied to the boom in gaming, including one specifically geared towards esports: the Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD). That is a mouthful to say, but it has the clever ticker symbol of “NERD.”
The NERD ETF, which launched in June, is competing for attention (and investor dollars) with the likes of the VanEck Vectors Video Gaming and eSports ETF (ESPO), the ETFMG Video Game Tech ETF (GAMR) and Defiance NextGen Video Gaming ETF (VIDG).
The field is about to get even more crowded. ETF company Global X announced Tuesday that it will soon launch the Global X Video Games & Esports ETF with the ticker symbol of “HERO.” It will be based on the Solactive Video Games & Esports Index, which has 38 companies in it.
But what sets the NERD ETF apart is that it is much more focused on the esports aspect of gaming and not just the makers of popular video games and consoles.
In fact, Will Hershey, co-founder and CEO of Roundhill Investments, said in an interview with CNN Business that the company does not own video game hardware makers Microsoft (MSFT), Sony (SNE) or Nintendo (NTDOF).
Hershey said his firm’s ETF is based on an index that Roundhill created. It’s a rules-based index that scans regulatory filings for keywords like “esports,” “video games” and “competitive gaming.” Roundhill then uses these findings to determine how much exposure the companies have to the esports business and weights the stocks accordingly in the ETF.
“We focus on thematic products targeted to the next generation of investors — and there is excitement about esports. [New England Patriots owner] Bob Kraft even bought into the Overwatch League with the Boston Uprising. We want companies that live and die on esports,” Hershey said.

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