Gaming ETF ESPO Nears $500 Million — Thematics on the Rise?

Thematic ETFs have lengthy epitomized the flexibleness and discrete nature of the ETF wrapper. With liquidity and buying and selling easy, issuers and asset managers may craft an entire slew of potential methods. The 2021 ETF rule made that even simpler, turbocharging the thematic ETF area. While many thematics didn’t take off, some have caught round and, in gaming ETF ESPO’s case, have truly seen a giant uptick in consideration this 12 months.

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The VanEck Video Gaming and eSports ETF (ESPO) launched even earlier than the arrival of the ETF rule. Charging 56 foundation factors, the gaming ETF tracks the MVIS Global Video Gaming & eSports index. The index gives a market cap-weighted checklist of fewer than 30 names, serving to it provide a concentrated publicity to the class. Companies therein have to return from only a choose few subsectors, together with gaming {hardware} and software program.

Hyper-Focused Gaming ETF ESPO’s 2025

The gaming ETF has, with that strategy, seen its AUM rise significantly YTD. According to YCharts information, the fund has gone from about $279 million in AUM to only below $500 million, at $496 million as of September 22. It has executed so with nearly $70 million in internet inflows for the 12 months, a wholesome flows quantity boosted by value appreciation for its investments.

The fund’s holdings embody some intriguing alternatives. For instance, its largest holding based on ETF Database, AppLovin Corp (APP), has returned a staggering 100% YTD, per YCharts. The agency’s deal with cellular advertising and marketing software program through applications like MAX and SparkLabs has helped it ship an eye-watering 259% return on fairness and 77% year-over-year quarterly income progress. Other names like Nintendo (7974) and Unity Software (U) play main roles, deepening the ETF’s deal with gaming software program and improvement names. 

Together, that has helped the gaming ETF return 45.5% YTD, per ETF Database information. That outperformed its ETF Database Category and FactSet Segment averages in that point.

Are thematics on the rise? At least within the gaming class, ESPO seems to be delivering with its laser deal with its theme. For these wanting publicity to an vital and thrilling expertise area, the gaming ETF might be one to look at.

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