MVIS launches global video gaming and eSports index

Jul 17th, 2018 | By | Category: Equities

MV Index Solutions (MVIS), the indexing division of ETF issuer VanEck, has launched the MVIS Global Video Gaming and eSports Index, a pure-play index tracking firms involved in the development of video games and eSports events.

MV Index Solutions launches global video gaming and eSports index

The new MVIS index tracks the performance of firms globally that are involved in the development of video games and eSports events.

“The video game industry has grown faster than expected in recent years and will stay on its current trajectory with the proliferation of new technology alongside support from over a billion gamers worldwide,” said Thomas Kettner, managing director at MVIS.

He added: “Our pure-play strategy provides an opportunity to participate in this innovative and growing market, which makes our index unique.”

The new index tracks the performance of companies globally that generate at least 50% of their revenues from video gaming and eSports (organized, multiplayer competitions with real money prizes).

Companies can include those that develop video games and related software/hardware, streaming services, and are involved in eSports events. Existing constituents can see their proportion of revenue derived from the video gaming and eSports sector fall below 50% and still remain in the index as long as the proportion stays above 25%.

To be eligible for inclusion, a firm must also have a market capitalization of at least $150 million and a three month average daily trading volume of at least $1m. The

The index is weighted by free float market capitalisation with a single issuer cap of 8%. Reconstitution and rebalancing occurs on a quarterly schedule.

Roughly a third (34.0%) of the index is currently allocated to stocks from the US, followed closely by Japan (28.2%), with the Cayman Islands (19.2%), South Korea (7.9%) and France (4.7%) making up the next largest country exposures.

Unsurprisingly, the index is almost exclusively dedicated to stocks from the information technology sector at 95.0% of the total index weight.

There are currently 25 constituents in the index, the largest being Nvidia (7.6%), Tencent Holdings (7.5%), Activision Blizzard (7.4%), Netease (6.9%), and Electronic Arts (6.1%). Three quarters of the index weight is allocated to mid- to large-cap stocks (those with a market cap greater than $6 billion) with the remainder in the small- to mid-cap- territory (between $1.5bn and $6bn).

The index takes the number of MVIS pure-sector exposure indices to ten. All the existing indices in this suite have been licensed to underlie ETFs, which collectively hold just shy of $3bn in AUM (as of 13 July 2018).

Should an ETF linked the new index emerge it will compete with the ETFMG Video Game Tech ETF (GAMR US). GAMR was launched in March 2018 under the PureFunds brand before being rebranded by ETF Managers Group following a partnership dispute last summer.

This fund tracks the EEFund Video Game Tech Index which tracks global firms actively engaged in supporting or utilizing the video gaming industry. It has AUM of $130m and comes with an expense ratio of 0.75%.

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