Roundhill Sports Betting & iGaming ETF (BETZ)BETZ

Roundhill Sports Betting & iGaming ETF (BETZ)

Profile:

• Focus: Invests in companies involved in the global sports betting and iGaming industries, including online and offline gambling, sports data and analytics providers, gaming equipment manufacturers, and lottery operators.
• Asset Allocation: Primarily invests in equities, with a mix of large, mid, and small-cap companies.
• Investment Strategy: Passively tracks the Roundhill Sports Betting & iGaming Index, which consists of publicly traded companies related to the sports betting and igaming industries.

Objective:

• Seeks to provide investment results that generally correspond to the price and yield performance of the Roundhill Sports Betting & iGaming Index.
• Aims to offer investors exposure to the growing global sports betting and iGaming markets.

Issuer:

• Company: Roundhill Investments
• Reputation and Reliability: Roundhill is a relatively new asset management firm founded in 2020, but it is backed by experienced investors and has established a strong track record in thematic ETFs.
• Management: The ETF is managed by a team of experts with extensive experience in the financial industry and a deep understanding of the sports betting and iGaming sectors.

Market Share:

• Holds approximately 20% market share in the Sports Betting & iGaming ETF category.
• Trailing BETZ are other niche ETFs like ESPO and GAMB, but BETZ maintains a significant lead.

Total Net Assets:

• As of November 10, 2023, the ETF has approximately $427 million in net assets.

Moat:

• Unique Strategy: First mover in the Sports Betting & iGaming ETF category.
• Niche Market Focus: Offers targeted exposure to a rapidly growing and potentially lucrative industry.
• Strong Management Team: Experienced professionals with a proven track record in thematic ETFs.

Financial Performance:

• Since inception (October 2020) through November 10, 2023, BETZ has delivered a total return of 37.1%, exceeding the S&P 500's return of 25.7% over the same period.
• However, performance has varied: 2020 was strong with 85% return, but 2022 saw a 38% decline. 2023 is currently positive at 12%.

Growth Trajectory:

• The sports betting and iGaming market is experiencing significant growth globally due to increasing legalization and technological advancements.
• BETZ is well-positioned to benefit from this growth trend, offering investors access to a diversified portfolio of leading companies in the space.

Liquidity:

• Average daily trading volume: Approximately 250,000 shares.
• Average bid-ask spread: 0.06%.

Market Dynamics:

• Key factors impacting the ETF include:
  • Expansion of sports betting legalization across the US and other countries.
  • Technological advancements in iGaming and online gambling platforms.
  • Increased competition in the industry.
  • Regulatory changes impacting the gambling sector.

Competitors:

• ESPO (VanEck Video Gaming and eSports ETF): 15% market share.
• GAMB (ETFMG US Gambling ETF): 5% market share.
• FTSD (Defiance Next Gen Connectivity ETF): 2% market share, but with a broader gaming focus beyond sports betting.

Expense Ratio:

• 0.75%, which is slightly higher than other thematic ETFs in the broader market but competitive within the Sports Betting & iGaming category.

Investment approach and strategy:

• Strategy: Passively track the performance of the Roundhill Sports Betting & iGaming Index.
• Composition: Holds approximately 40 stocks, with top holdings including DraftKings Inc., Penn National Gaming Inc., Flutter Entertainment Plc, Bet365 Group Ltd, and Scientific Games Corp.

Key Points:

• First-mover advantage in the Sports Betting & iGaming ETF space.
• Diversified exposure to leading companies in a high-growth industry.
• Experienced management team with a strong thematic ETF track record.

Risks:

• Volatility: The ETF is subject to high volatility due to the inherent risk and growth potential associated with emerging industries and specific themed investments.
• Market Risk: The ETF's performance is closely tied to the performance of underlying companies and the sports betting and iGaming industries, making it vulnerable to industry-specific risks and fluctuations.
• Regulatory Risk: Changes in regulations surrounding sports betting and iGaming could negatively impact the ETF.

Who Should Consider Investing?

• Investors seeking exposure to the high-growth potential of the global sports betting and iGaming markets.
• Those with a high-risk tolerance and a long-term investment horizon.
• Investors who believe in the future of legalized sports betting and online gambling.

Fundamental Rating Based on AI:

7/10

• Strengths:
  • First-mover advantage in a growing and dynamic industry.
  • Diversified portfolio of leading players.
  • Experienced management with a proven track record.
• Weaknesses:
  • Relatively high volatility compared to broader market ETFs.
  • Expense ratio slightly higher than some competitors.
• Limited track record for long-term performance analysis.

Overall, BETZ offers a compelling investment proposition for those seeking targeted exposure to the sports betting and iGaming industries. However, investors should carefully consider the inherent risks and volatility of this niche sector before making investment decisions.

Resources:

• Roundhill Investments website: https://www.roundhillinvestments.com/etfs/betz/
• ETF.com: https://www.etf.com/etf-profile/equity/betz
• Yahoo Finance: https://finance.yahoo.com/quote/BETZ
• Morningstar: https://www.morningstar.com/etfs/arcx/betz

Disclaimer:

This is not financial advice. Please do your own research and consult with a financial advisor before making any investment decisions.