Global X Funds is no stranger to thematic exchange-traded funds, and on Tuesday it added to its sizable roster of such products by launching three funds with a thematic bent that entail esports, cybersecurity and a thematic fund of funds.
The Global X Video Games & Esports ETF (HERO) tracks an index composed of companies that develop or publish video games, facilitate the streaming and distribution of video gaming or esports content, own or operate within competitive esports leagues, or produce hardware used in video games and esports, including augmented and virtual reality.
There are four existing ETFs focused on the video games, esports and/or digital gaming complex, and the investing public has given them a mixed reception. The oldest and largest fund in the group, the ETFMG Video Game ETF (GAMR), which debuted in March 2016, has $81 million in assets. The next biggest is the VanEck Vectors Video Gaming and eSports ETF (ESPO), with $41 million. The other two funds have less than $10 million in assets.
ESPO boasts a one-year return of 23.2%, which is the best among the three funds with a one-year track record. It also tops the one-year performance of the SPDR S&P 500 ETF (SPY) and Technology Select Sector SPDR Fund (XLK), which have returned 14.3% and 22.5% during that period, respectively.
Global X’s new HERO fund has an expense ratio of 0.50%, putting it in the middle of the pack in a category where fees range from 0.25% at the Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD) to 0.82% at GAMR.
Elsewhere, the Global X Cybersecurity ETF (BUG) invests in companies with a serious stake in cybersecurity technology, including those whose main business involves developing and managing security protocols to prevent intrusion and attacks on systems, networks, applications, computers and mobile devices.
Along with having a cute ticker symbol, this product comes with a net expense ratio of 0.50%, which makes it cheaper than its two existing competitors, the ETFMG Prime Cyber Security ETF (HACK) and First Trust NASDAQ Cybersecurity ETF (CIBR), which have expense ratios of 0.64% and 0.60%, respectively.
HACK launched in 2014 and CIBR came out the next year, and both have been well received by investors: HACK has assets of $1.5 billion and CIBR is at $1.1 billion. More important, they’ve delivered solid results. HACK has a three-year annualized return of 18.4% and CIBR has delivered 17.7% during that period, versus 12.9% for SPY.
Cybersecurity is very much a 21st-century problem, which unfortunately makes it a growth industry of sorts. That could help BUG make inroads against to its two entrenched rivals, and having the cheapest expense ratio of the three is helpful.
The third new Global X product, the Global X Thematic Growth ETF (GXTG), is a multi-theme fund providing broad exposure to various disruptive industries represented by an index containing various Global X thematic ETFs.