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Casino ETF Gets a G20 Lift

This article was originally published on ETFTrends.com.

The VanEck Vectors Gaming ETF (BJK) , the lone exchange traded fund dedicated to casino operators and gaming companies, rallied Monday after getting a lift from news out of the G20 summit held in Argentina over the weekend.

“Shares of Wynn Resorts Ltd., Melco Resorts & Entertainment Ltd., Las Vegas Sands Corp., and MGM Resorts International all rose at least 4.0 percent in early trading in the U.S., while the Bloomberg Intelligence Macau Gaming Index (BIGAMEAC) rose 9.3 percent to a 10-week high,” according to Bloomberg.

BJK, which turns 11 years old next month, tracks the MVIS Global Gaming Index (MVBJKTR). That benchmark “is intended to track the overall performance of companies involved in casinos and casino hotels, sports betting, lottery services, gaming services, gaming technology and gaming equipment,” according to VanEck.

Over 16 countries are represented in BJK with the U.S. commanding nearly 40% of the fund's weight, but good news for Macau is helpful to the ETF because it devotes almost 14% of its weight to China. Macau is the only Chinese territory where gambling is legal.

Why Macau Matters

Two BJK's top five holdings, stocks that combine for nearly 15% of the fund's weight, are Macau operators. Macau is the world's largest gambling hub.

“And an easier macroeconomic environment further helped the beaten down stocks, as the 'constructive outcome from Presidents Trump and Xi’s G20 meeting' should help the stocks recover, at least in the near term, according to Morgan Stanley,” reports Bloomberg.

Analysts are leaning bullish on the outlook for Macau gaming operators following the trade thaw between Presidents Trump and Xi.

“The temporary truce between Presidents Trump and Xi also provides a near-term catalyst, while 'the slope of economic deceleration in both China and the U.S. is likely to determine the intermediate-term trend in these stocks,'” Bloomberg reports, citing Nomura Instinet analyst Harry Curtis.

Analysts expect Macau's fourth-quarter revenue to rise 5% to 7%.

For more information on the consumer sector, visit our consumer discretionary category.

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