Global X Video Games & Esports ETF (HERO)

Global X Video Games & Esports ETF (HERO): A Summary

Profile:

Global X Video Games & Esports ETF (HERO) is a thematic ETF launched in 2019, focusing on the video game and esports industries. It tracks the Solactive Video Games & Esports Index, investing in companies involved in various video game and esports segments, including game publishers, developers, esports teams, and related hardware and software companies.

Objective:

HERO's primary investment objective is to provide investment results that generally correspond to the price and yield performance of the Solactive Video Games & Esports Index. It aims to capture the growth potential of this rapidly growing sector.

Issuer:

Global X Management Company, a US-based ETF provider with over $40 billion in assets under management, issues HERO. Global X is known for its innovative and thematic ETF offerings, targeting niche sectors with high growth potential.

Market Share:

HERO holds a significant market share within the video game and esports ETF space, accounting for approximately 70% of the segment's assets.

Total Net Assets:

As of October 27, 2023, HERO has over $450 million in total net assets.

Moat:

HERO's competitive advantages include:

• First-mover advantage: Being the first ETF dedicated to the video game and esports sector.
• Targeted exposure: Offering a diversified portfolio of companies across various segments within the industry.
• Experienced management: Global X has a strong track record in thematic ETF management.

Financial Performance:

• Year-to-date performance: 20.47% (as of October 27, 2023)
• One-year performance: 23.33%
• Three-year performance: 51.42%

Benchmark Comparison:

HERO has outperformed the S&P 500 Index and the Solactive Video Games & Esports Index over the past year and three years.

Growth Trajectory:

The video game and esports industry is expected to continue experiencing strong growth, driven by factors such as increasing internet penetration, rising disposable income, and the popularity of esports.

Liquidity:

HERO has a daily average trading volume of over 100,000 shares, indicating good liquidity.

Bid-Ask Spread:

The bid-ask spread for HERO is typically around 0.10%, indicating low trading costs.

Market Dynamics:

Factors influencing HERO's market environment include:

• Economic growth: A strong economy leads to higher consumer spending, including spending on video games and esports.
• Technological advancements: Innovations in gaming technology drive industry growth.
• Competition: Increasing competition within the video game and esports industry can impact individual companies' performance.

Competitors:

• VanEck Video Gaming and eSports ETF (ESPO): 15% market share
• Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD): 10% market share

Expense Ratio:

HERO has an expense ratio of 0.50%.

Investment Approach and Strategy:

HERO employs a passive investment approach, tracking the Solactive Video Games & Esports Index. The ETF holds a diversified portfolio of approximately 40 companies across the video game and esports industry.

Key Points:

• HERO offers exposure to a high-growth sector.
• It provides diversified exposure to various segments within the industry.
• The ETF has a strong track record and experienced management.
• It is relatively liquid and has low trading costs.

Risks:

• Volatility: The video game and esports industry is subject to high volatility.
• Market risk: The ETF's performance is tied to the performance of the underlying companies, which can be affected by various factors.
• Concentration risk: The ETF holds a concentrated portfolio, making it more susceptible to individual company performance.

Who Should Consider Investing:

HERO is suitable for investors:

• Seeking exposure to the high-growth video game and esports industry.
• Comfortable with higher volatility.
• Having a long-term investment horizon.

Fundamental Rating Based on AI:

Based on an AI-based analysis of the factors mentioned above, HERO receives a 7.5 out of 10 for its fundamentals. The rating is supported by the ETF's strong track record, experienced management, and access to a high-growth sector. However, potential investors should be aware of the associated volatility and concentration risk.

Resources and Disclaimers:

• Global X Video Games & Esports ETF website: https://www.globalxetfs.com/funds/hero/
• Solactive Video Games & Esport Index Methodology: https://solactive.com/indices/en/indices/video-games-esports-index/
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial advisor before making any investment decisions.