New York-based asset manager Van Eck Global has launched the Market Vectors-Gaming ETF on the American Stock Exchange, the first exchange-traded fund to be listed in the US offering invest
New York-based asset manager Van Eck Global has launched the Market Vectors-Gaming ETF on the American Stock Exchange, the first exchange-traded fund to be listed in the US offering investors exposure to companies involved in gambling-related firms worldwide.
The fund seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the S-Network Global Gaming Index, a basket of securities of gambling-related companies listed on global exchanges devised by Stowe Global Indexes and calculated and maintained by Standard & Poor’s Custom Indices.
The index returned 11.01 and 24.98 per cent respectively over the three and five years to the end of 2007. Companies included in the index predominantly derive at least 50 per cent of their revenue from gambling and include casino and resort operators, technology firms such as slot machine manufacturer International Game Technology, sports and horse-racing bookmakers such as UK-based Ladbrokes, and online gambling providers.
Casinos operators MGM Mirage, Hong Kong’s Melco PBL Entertainment and Kuala Lumpur-based Resorts World constitute 7.81 per cent, 0.58 per cent and 2.49 per cent of the index respectively, while International Game Technology is its biggest single constituent with 9.91 per cent.
‘Gaming has become an increasingly mainstream form of entertainment among the world’s growing middle class,’ says Jan van Eck, a principal at Van Eck Global. ‘In fact, there has been sharp expansion of the gaming industry in more than 150 countries around the globe. In addition to consumer demand, technical developments and favorable legislation further underpin the potential growth of this industry.
‘As the first ETF to target this sector, we believe that BJK will appeal to investors looking for a convenient means to access the global gaming market. After all, betting with the house sometimes has its advantages.’
Options are expected to be made available on the Market Vectors-Gaming ETF, which has a total net expense ratio of 0.65 per cent. The fund is the 11th exchange-traded fund introduced under the Market Vectors brand, which includes sector, single country and municipal bond ETFs and represented more than USD3.6bn in assets under management at the end of last year, out of a total of more than USD9.3bn for the Van Eck group as a whole.
