FinEx has launched a new ETF in Russia providing exposure to companies operating in the global video gaming and eSports industries. Companies in the video gaming & eSports industries were early beneficiaries during the Covid-19 environment.
The FinEx Video Gaming and eSports UCITS ETF (FXES RM) has listed on Moscow Exchange and comes with an expense ratio of 0.90%.
The fund tracks the MVIS Global Video Gaming and eSports Index, the same index that underlies the VanEck Vectors Video Gaming and eSports UCITS ETF (ESPO LN), Europe’s first video gaming & eSports ETF which debuted on London Stock Exchange in June 2019.
ESPO was a standout success story during the first 12 months of the Covid-19 pandemic – growing from $60 million in assets to more than $1 billion – as locked-down consumers spent more time playing video games and investors sought to capitalize on this trend.
The MVIS Global Video Gaming and eSports Index consists of companies from both developed and emerging markets with a market capitalization of at least $150 million and a three-month average daily trading volume of at least $1m.
Eligible companies include developers of video games and related software/hardware, operators of streaming services, and hosts of eSports events. To home in on the theme, the index methodology excludes any firm with less than a 50% revenue exposure to video gaming and eSports.
Once in the index, a constituent can see its proportion of revenue derived from the video gaming and eSports sector fall below 50% and remain in the index so long as the proportion stays above 25%.
The index is weighted by free-float market capitalization with a single issuer cap of 8%. Reconstitution and rebalancing occur on a quarterly schedule.
Stocks from the US account for the largest allocation in the index at 43.2%, followed by China (19.4%), Japan (18.0%), Taiwan (8.3%), and South Korea (4.6%).
The index is predominantly focused on stocks in the communication services sector, at 70.3% of the total index weight, followed by information technology stocks which make up 25.4%.
While the methodology excludes some major US-based players in the eSports industry – such as Microsoft and Amazon – due to its high revenue exposure threshold for index inclusion, the constituent list includes most of the well-known names associated with the space including Nvidia (9.1%), Advanced Micro Devices (8.1%), Tencent Holdings (7.6%), Sea (6.7%), Nintendo (5.6%), Activision Blizzard (5.3%), and NetEase (5.1%).