Ready, set, invest: The opportunity in video gaming
Expanding on the theme of technology, VanEck believes video gaming is the latest thematic to outperform, boosted by the use of artificial intelligence.
The firm’s VanEck Video Gaming and eSports ETF was launched in September 2020 and currently has $62 million in assets under management.
VanEck said the number of video game players is estimated to rise from 2.77 billion in 2024 to 2.86 billion next year, demonstrating a huge addressable marketplace for their stocks.
The benefit of a video gaming vehicle, it said, is the dynamic growth opportunity, targeted exposure and technology diversification.
Its holdings are broken down into three sectors: chipmakers, publishers and developers, and internet platforms. This includes holdings such as Tencent, Roblox, Ubisoft and Advanced Micro Devices.
Alice Shen, portfolio manager at VanEck, said: “The video gaming industry represents a long-term structural growth story, and it is supported by broader trends such as demographic shifts, changes to consumer preferences and the widening of monetisation avenues through subscription and free-to-play models.
“AI plays a crucial role in shaping the future of the video gaming industry by enabling developers to create more immersive, dynamic and personalised gaming experiences for a global market of nearly 3 billion gamers.
“At the same time, the video gaming industry is earning billions in annual revenue, supported by long-term trends that boost its attractiveness, such as demographic shifts and changing consumer demands.”
The VanEck Video Gaming and eSports ETF has returned 5.6 per cent since inception versus 6.2 per cent by its MVIS Global Video Gaming and eSports Index.
AUTHOR
Laura Dew
Recommended for you
Lonsec and SQM Research have highlighted manager selection as a crucial risk for financial advisers when it comes to private market investments, particularly due to the clear performance dispersion.
Macquarie Asset Management has indicated its desire to commit the fast-growing wealth business in Australia by divesting part of its public investment business to Japanese investment bank Nomura.
Australia’s “sophisticated” financial services industry is a magnet for offshore fund managers, according to a global firm.
The latest Morningstar asset manager survey believes ETF providers are likely to retain the market share they have gained from active managers.
