Tokyo-headquartered Nikko Asset Management has introduced its second ETF in Hong Kong with the launch of the NikkoAM E-Games Active ETF on the Stock Exchange of Hong Kong.

The fund provides actively managed exposure to video game, mobile game, and eSports businesses

The fund, which is the first actively managed equity ETF in Hong Kong, seeks long-term capital growth by investing in ‘E-Games’ companies, defined by Nikko as video game, mobile game, and eSports businesses.

The ETF is available to trade in Hong Kong dollars (Ticker: 3091 HK) and US dollars (9091 HK) and has an ongoing fee of 0.70%.

According to the fund’s prospectus, the ETF may invest in firms listed on any stock exchange globally. This includes American Depository Receipts (ADRs), Global Depository Receipts (GDRs), and thematic ETFs focusing on video game and eSports companies.

The fund will target companies directly related to the E-Games industry including firms developing electronic and mobile games or organizing eSports competitions.

To a lesser extent, the ETF may also invest in companies supplying the industry with ancillary services such as hardware and software technology, global infrastructure, and telecommunication solutions.

According to Newzoo, a specialist in games market research, the E-Games industry’s total revenue reached $152.1 billion in 2019, surpassing the combined revenues of the movie and music industries. Newzoo also estimated the industry will grow at around 10% annually to reach $200bn in 2022.

Video gaming and eSports companies have also recently enjoyed a boost from the Covid-19 pandemic as millions of consumers ramped up their spending in these industries.

Nikko made its ETF debut in Hong Kong in October 2019 with the launch of the Nikko AM Global Internet ETF. This fund is passively managed, linked to the iEdge-FactSet Global Internet Index, and provides thematic equity exposure to leading internet companies globally.