The recently-launched GAMR (PureFunds Video Game Tech, Expense Ratio 0.75%, $7.8 million in AUM), which is the first and only ETF entry to the “Video Game” segment of Technology companies, is worth watching heading into the holiday season.
The fund is off of its late September highs, and has struggled below its 50 day MA for about the past month and should remain in focus as we approach next week’s Black Friday and the holiday shopping season. GAMR tracks the EEFund Video Game Tech Index, and accompanying fund literature on the PureFunds website does a good job in summarizing why one might consider the segment itself as part of an investment portfolio (outside of say investing in a broader “Technology” fund).
In a way that sends us down a trip on “Memory Lane,” PureFunds states:
“With humble origins in pizza parlors and arcades, the global video game industry has expanded to all corners of the world and to every size of screen. From mobile devices to personal computers, to consoles and set-top boxes, video games are enjoyed by over a billion people with estimates of global revenue approaching $100 billion annually. Exciting trends such as the shift to digital distribution of software, proliferation of HD and 4K displays, cloud content and streaming, virtual/augmented reality, motion tracking, episodic content, and diversified monetization models, are stimulating innovation and offer expanded opportunities for entertainment, education, simulation, and other game tech applications.”
When we look at GAMR’s top holdings, we see that the largest holding is still Nintendo Co Ltd. (7.02%) ordinary shares that trade overseas. Most investors are acclimated by the meteoric rise that Nintendo stock has had through much of 2016 mostly on the “Pokemon” craze, but the most recent headlines regarding the company are more linked to a “1980’s Throwback” theme, the “Nintendo Classic.” This throwback system was released earlier this month to sell-out fanfare, and buyers of newly purchased units of the mini-console are attempting to flip them for as much as $279 on sites like Ebay.com and Amazon.com.
The console itself allows the user to play thirty classic NES games from the 1980s such as PAC-MAN, Super Mario Bros., Castlevania, Castlevania II: Simon’s Quest, Donkey Kong, Kid Icarus, Mega Man 2, and so forth, promising to introduce 1980s gaming to a new generation (like my children, 6 and 3 for example should Santa Claus be able to locate a unit at a reasonable price).
An interesting feature of GAMR is that it also allows the ETF investor access to several “Ordinary Shares” listings in the Video Gaming segment that otherwise would be difficult for an individual investor to buy on a one-off basis including #1 weighted Nintendo, but also #3 NCsoft Corp (5.04%), #6) NEXON Co Ltd (4.74%), #9 Capcom Co Ltd (4.56%), and #10 Square Enix Holdings Co Ltd (4.55%). Capcom and Square Enix will be familiar video game manufacturing names to anyone as will U.S. listed companies like 4) ATVI (5%), 5) TTWO (4.97%), and #8) EA (4.56%).
GAMR shares were unchanged at $31.57 in Friday afternoon trading. Year-to-date, GAMR has gained 25.17%, easily besting the performance of the S&P 500 — not to mention many Tech-focused funds — in the same period.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.