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ETFs to Play Summertime Gaming


This summer has been a boon for the Video Gaming industry, and related stocks have been on the move with leading names ATVI and TTWO both rising on a pick-up in trading volume in the options (predominantly calls) on both companies.

ATVI for example is trading at a multi-year high on gigantic trading volume in recent sessions as is related stock EA .

While we read about the SEC registration of XLZ (SPDR Leisuretime ETF) in late 2010, the product still has not hit the market, with the idea behind this ETF was to provide exposure to “Leisure” sub-sectors including Cruise Ship Operators, Theme Parks, Restaurants, and Video Game companies.

Video gaming stocks typically do not have significant weightings in broad Technology or Software related ETFs (for example EA has a 0.60% weighting in PSJ (PowerShares Dynamic Software, Expense Ratio 0.60%) and RYT (Guggenheim S&P Equal Weight Technology, Expense Ratio 0.50%) carries a 0.50% weighting, so getting pure-play if not diversified via “leisure” exposure to either traditional “Console” type video games and/or online video gaming companies based in the U.S. or abroad is still unachievable by means of an ETF.

While MSFT and SNE have a number of business lines and are not solely reliant on, in the case of Microsoft the fortunes of the X-Box and in Sony’s case, the Playstation consoles, both of these stocks are represented in various ETFs. [Internet ETFs: Is the Dot-Com Bubble Back?]

IYW (iShares U.S. Technology, Expense Ratio 0.48%) has a 10.51% weighting to MSFT, followed by PXLG (PowerShares RAFI Fundamental Pure Large Growth, Expense Ratio 0.39%) at 8.72% and XLK (SPDR Technology Select Sector, Expense Ratio 0.18%) at 8.68% while SNE is represented notably in FVI (First Trust Value Line Equity Allocation Index, Expense Ratio 0.70%). [Some Tech ETFs for a Slice of Apple]

When it comes to video games, we cannot forget about the retailers as well which physically sell the video games to customers, and Gamestop ( GME ) immediately comes to mind. The stock is well represented in a few products, notably PMR (PowerShares Dynamic Retail, Expense Ratio 0.60%) and RCD (Guggenheim S&P Equal Weight Consumer Discretionary, Expense Ratio 0.50%), while having smaller weightings across a handful of other ETFs.

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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