ETF Edge

'Global phenomenon' of video gaming has legs after positive Q1 for esports ETF: Van Eck CEO

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VanEck esports ETF has positive first quarter and CEO sees more runway ahead

Gaming isn't going anywhere.

So says Jan van Eck, whose firm runs the VanEck Vectors Video Gaming and eSports ETF (ESPO). Despite 2020's market turmoil, ESPO has made meaningful strides, climbing more than 12% year to date and hitting a new 52-week high on Friday.

The ETF tracks a basket of companies "involved in video game development, esports, and related hardware and software," according to VanEck's website.

Its top holdings are something of an industry smorgasbord. They include shares of chipmakers Nvidia and Advanced Micro Devices, Chinese internet giant Tencent, and video game makers Nintendo, Activision Blizzard and Electronic Arts.

"The esports ETF actually was up in the first quarter, believe it or not," van Eck, who is CEO of Van Eck Associates and the VanEck Vectors ETF Trust, told CNBC's "ETF Edge" on Monday.

ESPO notched a 2% gain for the calendar quarter ending March 31, 2020.

"I hope that's not what my colleagues are doing, playing esports all day long, but ... this is, I think, hopefully, a longer-term trend that I think has a longer ways to go," van Eck said.

While most gaming stocks "aren't exactly cheap right now" — industry leader Take-Two Interactive, also a holding in ESPO, trades at a nearly 43 times price-to-earnings multiple — the data driving them is impressive, van Eck said.

One of ESPO's constituents based in Singapore has seen "70 million people log in every day and play sports games on their platforms, and that's all Asia. That's no U.S," van Eck said. "So, it's really a global phenomenon."

Gaming-related ETFs have held up remarkably well despite the stock market's broad-based declines.

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