Roundhill unveils actively managed pro sports ETF

Mar 18th, 2021 | By | Category: Equities

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Roundhill Investments has launched a new actively managed ETF, the Roundhill MVP ETF (MVP US), providing exposure to the world of professional sports.

Roundhill unveils actively managed pro sports ETF

The fund is the only ETF in existence today to target the professional sports investment theme.

For the uninitiated, MVP is an initialism of Most Valuable Player.

The fund, which has listed on NYSE Arca, invests in companies across four business segments: professional sports teams, professional sports leagues, sports media, and sports apparel.

Exposure to professional sports teams will be emphasized.

Eligible companies may be involved in any of a diverse range of sports including soccer (football), baseball, American football, basketball, hockey, tennis, wrestling, automobile racing, and mixed martial arts, among others.

The strategy may also target exposure to eSports (professional video game competitions with real money prizes) and strategy board games.

Stocks are selected for the portfolio from a global universe of developed and emerging market companies with any market capitalization.

As of 17 March, the ETF contained 36 holdings with just over half (52.7%) of its exposure allocated to stocks listed in the US. The next-largest country exposures were Italy (13.0%), Germany (11.8%), the UK (7.8%), and Turkey (7.7%).

Notable positions included Madison Square Gardens (9.4%), Liberty Media (7.4%), Manchester United (7.4%), Juventus (7.1%), Borussia Dortmund (6.0%), Nike (4.5%), World Wrestling Entertainment (4.0%), and Adidas (3.5%).

Other well-known brands in the fund included the New York Knicks, New York Rangers, Atlanta Braves, AS Roma, Formula One, and Puma.

Democratizing sports ownership

Roundhill cites a study from NPD Group, a market research company focused on consumer trends, which indicates that the global sports market is expected to be worth $626 billion by 2023 – up 33% from $471bn in 2018.

The research also highlights that sports franchises – the ETF’s area of focus – are scarce, premium assets that have a strong record of value appreciation. From 2011 to 2020, the average franchise across the NFL, NBA, NHL, MLB, and Premier League increased in value by over 500%.

Global revenue from sports media rights is expected to balloon to $85bn by 2025, a 75% increase compared to 2018, according to estimates from Rethink Research, driven by growing consumer access to streaming services.

Will Hershey, co-Founder of Roundhill Investments, commented: “We are excited about the launch of MVP which will allow everyday investors to own stakes in sports teams they know and love. The professional sports industry had a difficult year in 2020, but we are confident that a successful vaccine rollout will bring fans back to stadiums worldwide.”

The fund comes with an expense ratio of 0.75%.

Roundhill is not the first ETF sponsor to tackle this theme. Back in 2017, an outfit called SportsETFs launched the ProSports Sponsors ETF (FANZ) in partnership with white-label platform Exchange Traded Concepts. Sadly, this fund did not make the cut and was retired in 2019.

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