Video games are one of the most popular artistic mediums on the planet. Though gaming on smart phones is growing at an absurd rate, console and computer games are now as popular as ever. Last year, the video game industry alone was worth a whopping $99.6 billion, according to research site Newzoo. Since game sales and popularity are growing, that industry valuation will undoubtedly surpass $100 billion in 2017.
Like all industries, numerous video game companies are publicly traded on the stock market. Everyone from Grand Theft Auto owner Take Two Interactive ($TTWO) to shooting game factory Activision ($ATVI) has a stock that anyone can buy. Yet if you wanted to buy one share of stock from every publicly traded gaming company, you’ll end up shelling out thousands of dollars. (Think of all the Nintendo Switches you can buy with that!)
That’s why $GAMR exists. As the first video game exchange-traded fund (or ETF), $GAMR lets you, the game-loving investor, invest in the most popular game companies on the planet for a single price. How does $GAMR work, and should you invest in it? Let’s take a look.
$GAMR lets you invest in 37 different video game stocks for one low price.
By purchasing a share of $GAMR (priced at $38.78 as of this writing) , you essentially own small percentages of different game stocks. This means owning a percentage of Activision, Electronic Arts ($EA), Sony ($SNE), and everything in between. If there’s a publicly traded video game stock, it’s probably part of $GAMR.
How does $GAMR work?
$GAMR follows an index called the EEFundVideoGame Tech Index. This index, produced by International Securities Exchange, is one way to monitor the overall health of the game industry. If the game industry performs well on the stock market, then the index increases, and vice versa.
$GAMR, like the index, is based on a weighted average determined by International Securities and Pure Funds, $GAMR’s manager. If the average performance of stocks in $GAMR increases in a day, then the value of $GAMR increases. If stocks in the video game industry are down, then the value of $GAMR decreases.
Like other ETFs, $GAMR has a yearly fee. Each year, Pure Funds takes .75% to pay the fund’s managers and keep $GAMR running. This is not incredibly high, as mutual funds and other high-cost ETFs can take 1% a year, but it’s still three-quarters of a percent that you’re missing out on. At the same time, the fee is factored into the price of the fund, so you won’t even notice it. It’s also cheaper than buying handfuls of shares in each company in the $GAMR fund.
How does $GAMR perform?
Rather well, actually. The fund is up 29.05% since the start of the year, and 41.38% in the last year. That’s better than the market average. The fund is also up 50.08% since its inception in March of last year. This means that if you invested in $GAMR when it first launched, your investment is now 1.5x what it was before.
Should you invest in $GAMR?
If you want to invest in the video game space but don’t want to shell out hundreds of bucks on Activision or EA stock, $GAMR provides an inexpensive investment opportunity. It also lets you spread your money across several companies instead of one. It’s worth noting that $GMAR invests in every game company, including some that might not be performing as well and could potentially drag down the fund’s value.
If you do have the money to invest directly in individual stocks, you could take a look at high-performing game stocks like Activision and EA. Just be sure to do your research before you invest in anything. You don’t want to go in firing blindly!