Video Gamin Stocks

ESPO Looks to Score in the World of Investing

For investors captivated by the world of gaming, VanEck Vectors Video Gaming and eSports ETF (NASDAQ:ESPO) may be of interest for those who are looking to score in the market.

ESPO is an exchange-traded fund (ETF) that tracks the overall performance of companies involved in video game development, esports and related hardware and software. The fund’s portfolio is made up of stocks related to video gaming and esports.

To be eligible, these stocks must generate at least half of their revenue from relevant industries, such as those mentioned above, and streaming services as well. For investors who prefer the esports side of the gaming world, ESPO also holds companies that are involved in esports events, including league operators. This gaming-focused ETF has a global reach, as its primary focus is on well-known game developers and hardware companies from the United States, Japan, China and Korea.

ESPO has an expense ratio of 0.55% and a yield of 0.14%. It has amassed $567.61 million in assets under management.

Along with many stocks and funds across nearly all sectors, ESPO dropped sharply in mid-March, but recovered fast in early April. In fact, its 200-day moving average (MA) hit an all-time high on April 17, with an opening price of $43.23. As is evidenced by the chart below, the fund’s 50-day MA has continued to climb steadily, even across the COVID-19-clouded lows in March.

Chart courtesy of www.stockcharts.com

As this ETF is focused on all things related to the gaming and esports industries, 77.21% of its portfolio is made up of holdings in the Communications Services sector. 17.72% of the portfolio is in the Technology sector. Its top five holdings include NVIDIA Corp. (NVDA), 8.22%; Tencent Holdings Ltd. (00700), 8.02%; Advanced Micro Devices Inc. (AMD), 6.77%; Nintendo Co. Ltd. (7974), 6.56%; and Sea Ltd. ADR (SE.SI), 6.28%.

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The fund’s ticker, ESPO, also may conjure up recollections for many investors of the nickname for NHL Hockey Hall of Fame center Phil Esposito, a teammate with the great defenseman Bobby Orr in the 1970s. They won two Stanley Cup Championships together with the Boston Bruins in 1970 and 1972. Esposito, inducted into the Hockey Hall of Fame in 1984, is sixth in NHL career goals, with 717, and 10th in points (goals and assists), notching 1,590.

In sum, VanEck Vectors Video Gaming and eSports ETF (NASDAQ:ESPO) is a strong competitor in the Global Video Games and Esports segment. With a worldwide reach and portfolio packed with gaming-related holdings, it may be worth considering for investors ready to take a deeper plunge into the world of virtual games and esports.

However, this kind of ETF may not be appropriate for all portfolios. Thus, interested investors always should conduct their due diligence and decide whether the fund is suitable for their investing goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.