Get Some Skin In The Game With 2 ETFs Focused On Betting And Fantasy Sports
Investing.com | Jul 28, 2021 09:34
The 2020 Tokyo Olympics are finally underway. While millions of fans will be enjoying hours of competitive sports, investors might also be keen to take advantage of increased interest in sports betting.
Recent years have seen the inception of several thematic funds that focus on sports betting, fantasy sports and iGaming. Therefore, today we discuss two exchange-traded funds (ETFs) that could appeal to a range of sports fans.
h2 A Growing Industry/h2In May 2018, the US Supreme Court struck down the Professional Amateur Sports Protection Act (PASPA). This federal law had essentially limited sports betting to a handful of states—Delaware, Montana, Nevada and Oregon—for more than two decades. As a result, individual states can now establish regulated sports betting operations.
This development has provided tailwinds for the segment. Now , more than 20 states have legalized sports betting. Recent metrics highlight: The global sports betting industry reached a market size of $203 billion in 2020, with revenues in the US predicted to grow to as much as $8 billion by 2025.
Meanwhile, daily fantasy sports companies have also benefited form this legalization. In the US, DraftKings (NASDAQ:DKNG) and FanDuel, which is part of the UK-headquartered Flutter Entertainment (OTC:PDYPY), are the two leading platforms for sports betting.
The Fantasy Sports & Gaming Association points out that there are more than 57 million fantasy sports players in the United States and Canada. These fans put together a virtual team of real sports players in popular sports, like football, baseball, basketball and soccer. Industry demographics highlight fantasy players are “81% male, 19% female. 47% make more than $75,000.”
Finally, the umbrella term iGaming typically refers to all online betting, including casino games like poker and slot machines. With that information, here are two funds to consider.
h2 1. Roundhill Sports Betting & iGaming ETF/h2Current Price: $27.70
52-Week Range: $15.59 – $33.26
Dividend Yield: 0.26%
Expense Ratio: 0.75% per year
The Roundhill Sports Betting & iGaming ETF (NYSE:BETZ) focuses on companies in the sports betting and iGaming industry. Such businesses might operate in-person or by way of online sports books or gambling platforms. They could also provide the infrastructure or technology to gaming operators.
Get The App
BETZ, which has 42 holdings, tracks the returns of the Roundhill Sports Betting & iGaming Index. The fund started trading in June 2020. Its net assets stand at about $366 million. In terms of sectors, we see iGaming (32.8%), followed by sports book (26.8 %) and technology (22.4 %). The top 10 names make up about 37% of net assets.
Leading holdings include United Kingdom-based global sports betting and gaming operator Flutter Entertainment; DraftKings, whose platform offers daily fantasy sports, sports betting and iGaming; Australian wagering platform Pointsbet (ASX:PBH); Penn National Gaming (NASDAQ:PENN), which owns and manages gaming, racing facilities and gaming terminal operations like slot machines; online casino and sports betting gaming Rush Street Interactive (NYSE:RSI); and Tabcorp (OTC:TACBY).
Interest in betting and various forms of online entertainment first surged throughout the pandemic. As a result, the fund returned more than 72% in the past year. It hit a record-high in mid-March. However, it is only up 7% year-to-date. Potential investors could regard this recent decline of about 20% as a better opportunity to buy the ETF that focuses on a growth industry.
h2 2. iShares MSCI Hong Kong ETF/h2Current Price: $25.52
52-Week Range: $20.91 – $28.17
Dividend Yield: 2.28%
Expense Ratio: 0.51% per year
The iShares MSCI Hong Kong ETF (NYSE:EWH) is an indirect play on the industry. The fund invests in large and mid-sized businesses based in Hong Kong, which is an hour away from Macau, where casinos are legal and betting is big business.
Metrics highlight :
“Home to the biggest games with the highest stakes in the world, the casinos in Macau contributed a gross revenue of around US$36.7 billion in 2019, over four times that of Nevada’s casino gaming revenue.”
EWF, which has 37 holdings, tracks the investment results of the MSCI Hong Kong 25/50 Index. The fund started trading in March 1996, and net assets stand around $1.113 billion.
In terms of sectors, we see real estate (21.63%), followed by insurance (20.90%) and diversified financials (16.34%). The top 10 names make up about 65% of net assets.
Leading holdings include insurance heavyweight AIA Group (OTC:AAGIY); Hong Kong Exchange & Clearing (OTC:HKXCY), power equipment group Techtronic Industries (OTC:TTNDY), property developer Sun Hung Kai Properties (OTC:SUHJY) and Link Real Estate Investment Trust (HK:0823).
The fund returned 23% in the past year and 6% YTD. EWH saw an all-time high in late May. Since then, it is off by about 10%. Readers who believe a diverse range of Hong Kong businesses could benefit from this important sector in Macau might want to research the fund further. Such an international focus could also offer diversification for US-based investors.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.