Factor Advisors, a subsidiary of ETF Managers Group, in partnership with PureFunds, ISE ETF Ventures, and EE Fund Management, begun trading the PureFunds Video Game Tech ETF (NYSE Arca: GAMR) on Wednesday, March 09, 2016.
Here is a synopsis of the new ETF:
|Exchange: NYSE Arca
|Name: PureFunds Video Game Tech ETF
|Net Expense Ratio: 0.75%
The PureFunds Video Game Tech ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the EEFund Video Game Tech index.
The EEFund Video Game Tech index tracks the performance of the common stock (or corresponding American Depositary Receipts – ADRs or Global Depositary Receipts – GDRs) of exchange-listed companies across the globe (including in emerging markets) that are actively engaged in a business activity supporting or utilizing the video gaming industry (Video Gaming Companies), specifically:
(i) Companies that are software developers or hardware providers for the entertainment, educational software, or virtual reality/simulation segments of the video gaming industry or whose business model relies solely on delivering goods and services to these segments (collectively, “pure-play” companies).
(ii) Companies that are not pure-play companies but provide intellectual property in support of the video game, educational software, or virtual reality/simulation segments (“non-pure-play” companies).
(iii) Large broad-based companies who business model supports the video game, educational software, or virtual reality/simulation segments (“gaming conglomerate” companies).
The initial universe of Video Gaming Companies is determined based on proprietary research and analysis conducted by EE Funds LLC (Index Provider) in partnership and consultation with the International Securities Exchange, LLC (ISE). The Index Provider uses a variety of publicly available resources for such analysis, including financial statements and other reports published by issuers to determine whether a company is actively engaged as a Video Gaming Company and its status as a pure-play, non-pure-play, or gaming conglomerate company (each, a “sector”).
Video Gaming Companies are then screened for investibility (e.g., must not be listed on an exchange in a country which employs certain restrictions on foreign capital investment), a minimum market capitalization of $100 million, and an operating company structure (as opposed to a pass-through security).
As of each rebalance date, the pure-play and non-pure-play sectors make up 90% of the Index weight with each of the pure-play and non-pure-play sectors being weighted based on the aggregate market capitalization of the companies in their respective sectors relative to the aggregate market capitalization of all of the Index constituents (i.e., all Video Gaming Companies). The gaming conglomerate sector makes up 10% of the Index weight.
The Index constituents are equally weighted within each sector.
The resulting weight distribution prevents the large gaming conglomerate companies from dominating the Index, while allowing smaller pure-play and non-pure-play companies to adequately influence Index performance. Individual constituent weightings may be adjusted to account for constituent securities with limited liquidity and/or small market capitalizations.
The Index has a semi-annual review in June and December of each year at which times the Index is reconstituted and rebalanced by the Index Provider in consultation with ISE. Component changes are made after the market close on the third Friday of June and December and become effective at the market opening on the next trading day. Changes are announced on the Index Provider’s publicly available website at least five trading days prior to the effective date. As of February 15, 2016, the Index had 36 constituents.
Top 10 Holdings (03/09/16):
|ACTIVISION BLIZZARD INC
|SQUARE ENIX HOLDINGS CO LTD
|GAMESTOP CORP-CLASS A
|KONAMI HOLDINGS CORP
|GLU MOBILE INC
|TAKE-TWO INTERACTIVE SOFTWRE
|ELECTRONIC ARTS INC
Country Weightings (03/09/16):
GAMR Home Page
Here is a comment from Ted Pollak, President of EE Fund Management:
“Video games provide consumers with compelling cost-per-hour entertainment value, and attractive margin opportunities for software developers. The demands for processing and graphics capability motivate semiconductor companies to produce faster and more efficient chips. Platform makers continually improve their systems. Peripheral and component makers enjoy repeat sales of input devices, accessories, and computer parts. New paradigms like virtual reality, free-to play, and game streaming expand opportunities and keep innovation fresh. All this adds up to a dynamic and evolving industry landscape with multiple paths for potential future growth.”