The index contains 36 companies across a range of software developers/publishers/distributors or platform providers for the video game, interactive training, or simulation segments. It also includes makers of accessories and peripherals for these segments, as well as large conglomerates whose business models support these segments.
As noted in fund literature, video games have morphed from their origins in pizza parlors and arcades to become a massive global industry with an estimated reach of more than one billion people and annual sales of $100 billion. And the growing rollout of broadband, mobile devices and new applications appear to give video-related industries a long runway for growth.
The top 10 holdings include notable names Activision Blizzard, Gamestop and Take-Two Interactive Software. Equally important, or course, are the lesser-known names that are helping to drive the industry’s growth.
Companies from the U.S. and Japan provide the bulk of the portfolio’s holdings at 55 percent and 30 percent, respectively. Meanwhile, nearly four-fifths of the holdings are pure-play companies.
These two new funds join PureFunds’ existing lineup of similarly narrow-focused, tech-oriented ETFs that includes the PureFunds ISE Big Data ETF (BDAT), PureFunds ISE Mobile Payments ETF (IPAY) and PureFunds ISE Cyber Security ETF (HACK).
HACK in particular generated buzz when it launched in November 2014 with an irresistible investment thesis during a time when major cyber attacks seemingly were a weekly occurrence. The ETF’s share price eventually zoomed more than 30 percent, but as of Wednesday's market close traded below its inception price.
It has a sizable asset base of roughly $700 million, but that’s down from $1 billion last summer.
The BDAT and IPAY funds haven’t attracted nearly as much attention since their respective launches last July. IPAY has garnered nearly $7.9 million in assets and BDAT holds just $1 million, according to Morningstar. And both trade below their first-day prices.
In fairness, both funds have faced general market headwinds during their brief runs. But as seen with HACK, funds tapping into trendy, if not sexy sectors with seemingly long-term growth prospects can come with a bumpy ride.