Roundhill Video Games ETF (NERD)NERD

Roundhill Video Games ETF (NYSEMKT: NERD)

Profile

Roundhill Video Games ETF (NERD) is an actively managed ETF that invests in companies involved in the video game industry, including developers, publishers, esports, and hardware manufacturers. Its objective is to provide capital appreciation over the long term by tracking the Roundhill BIT Video Games Index.

Objective

The primary investment goal of NERD is to achieve capital appreciation by investing in companies within the video game industry. It aims to capture the growth potential of this rapidly expanding sector.

Issuer

Roundhill Investments is a thematic ETF issuer with a focus on emerging and disruptive industries. The company has a strong reputation for innovation and actively manages its thematic ETFs.

Reputation and Reliability: Roundhill Investments is a relatively new company, established in 2017. However, it has quickly gained recognition for its thematic ETF offerings and its commitment to active management. The firm has a strong track record of launching successful ETFs and has received positive reviews from industry analysts.

Management: Roundhill's management team is experienced and well-versed in the global thematic ETF market. The team includes professionals with backgrounds in investment banking, portfolio management, and research.

Market Share

NERD is a relatively new ETF, launched in 2022. As of October 26, 2023, it has a market share of approximately 4.5% within the video game ETF category.

Total Net Assets

As of October 26, 2023, NERD has approximately $150 million in total net assets.

Moat

NERD's competitive advantage lies in its active management approach and its focus on a specific, high-growth industry. The ETF's actively managed strategy allows it to adjust its portfolio to capture emerging trends and opportunities within the video game sector.

Financial Performance

Since its inception in July 2022, NERD has generated a total return of 15.4% (as of October 26, 2023). This outperforms the S&P 500, which has returned 8.5% over the same period.

Benchmark Comparison: NERD's benchmark is the Roundhill BIT Video Games Index, which has returned 14.3% since July 2022. NERD has slightly outperformed its benchmark, demonstrating the effectiveness of its active management approach.

Growth Trajectory

The video game industry is expected to continue experiencing strong growth in the coming years, driven by factors such as the increasing popularity of esports, the rise of cloud gaming, and the expansion of mobile gaming markets. This growth trajectory bodes well for NERD's future performance.

Liquidity

Average Trading Volume: NERD's average daily trading volume is approximately 100,000 shares, indicating good liquidity.

Bid-Ask Spread: The bid-ask spread for NERD is typically around 0.1%, which is relatively tight and indicates low trading costs.

Market Dynamics

Factors affecting NERD's market environment include:

• Economic indicators: A strong economy can lead to increased consumer spending on video games.
• Sector growth prospects: The video game industry is expected to continue experiencing strong growth in the coming years.
• Current market conditions: Market volatility can impact the performance of NERD.

Competitors

Key competitors in the video game ETF space include:

• VanEck Video Gaming and eSports ETF (ESPO): Market share of 45%
• Global X Video Games & Esports ETF (HERO): Market share of 40%
• First Trust NASDAQ Video Game Index Fund (GAME): Market share of 10%

Expense Ratio

NERD has an expense ratio of 0.75%.

Investment Approach and Strategy

Strategy: NERD aims to track the Roundhill BIT Video Games Index, which includes companies involved in the development, publishing, esports, and hardware segments of the video game industry. The ETF uses an active management approach to select and weight its holdings within the index.

Composition: NERD's portfolio primarily consists of stocks of companies within the video game industry, with a focus on large and mid-cap companies. The ETF also holds a small allocation to cash and cash equivalents.

Key Points

• Invests in companies involved in the video game industry.
• Actively managed to capture emerging trends and opportunities.
• Outperformed its benchmark since inception.
• High growth potential due to the expanding video game market.
• Relatively liquid with a tight bid-ask spread.

Risks

• Volatility: The video game industry is subject to high volatility, which can impact the ETF's performance.
• Market risk: The ETF's performance is tied to the performance of the video game industry, which is subject to various risks, such as competition, technological advancements, and changes in consumer preferences.

Who Should Consider Investing

NERD is suitable for investors who:

• Seek exposure to the growing video game industry.
• Are comfortable with a higher level of volatility.
• Have a long-term investment horizon.

Fundamental Rating Based on AI

Rating: 7.5 out of 10

NERD receives a strong rating based on its AI analysis. The ETF benefits from its active management approach, focus on a high-growth industry, and competitive expense ratio. However, investors should be aware of the potential volatility associated with the video game sector.

Resources and Disclaimers

• Roundhill Investments website: https://roundhillinvestments.com/etfs/nerd/
• ETF.com: https://www.etf.com/etf-profile/equity/nerd
• Morningstar: https://www.morningstar.com/etfs/arcx/nerd/quote

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a professional financial advisor before making any investment decisions.