New underlying index seeks to offer pure-play* exposure to the potential growth of video game software
Roundhill Investments is pleased to announce several updates to its NERD ETF, including a new underlying index and fund name.
Effective at close of business on September 26, 2022, the NERD ETF’s name changed to the Roundhill Video Games ETF, reflecting its revised focus on pure-play gaming software. Meanwhile, the fund’s underlying index transitioned to the Nasdaq CTA Global Video Games Software Index™ (“PLAYR2™”), which offers targeted exposure for investors looking to invest in the potential growth of video games globally. The Index is a modified market capitalization weighted index consisting of companies involved in gaming software development and publishing across mobile, console, PC, and emerging segments, such as VR and AR. The Index also excludes video game companies domiciled in China and Russia, potentially reducing geopolitical risks to the portfolio.
According to research firm Newzoo, global gaming revenues are anticipated to grow to $219 billion by 2024, compounding annually at 8.7% from 2019 to 2024. Based on current Newzoo estimates, gaming already represents the largest form of entertainment globally by revenues, surpassing film, television, and music. Newzoo’s research estimates that the gaming market may continue to expand, with mobile gaming — the largest segment — anticipated to increase 5.1% year-over-year to $103.5 billion this year.
Gaming’s increasing cultural relevance and continued growth has led to increased merger and acquisition activity for the industry, with 12 of the 17 largest gaming transactions occurring since 2020, including Microsoft’s $68.7 billion January proposal to buy Call of Duty publisher Activision Blizzard.
As of Monday’s close (September 26th, 2022), the NERD ETF’s top holdings now include Nintendo (18.3% weight), Electronic Arts (10.6% weight), Roblox (6.6% weight), and Take-Two Interactive (6.5% weight). Nintendo is best known for its Mario and Pokémon franchises, while EA’s Madden and FIFA franchises are the two most successful in the history of sports simulation. Meanwhile, according to GamesIndustry.biz, Take-Two’s Grand Theft Auto V is the most profitable entertainment title of all time.