Attention Sports Fans: An ETF That Tracks Corporate Sponsorships Just Hit The Market
Sports are woven deeply into the fabric of American culture and business, and that includes Wall Street. Just think about the impact athlete endorsements can have on stocks such as Nike Inc (NYSE:NKE) and Under Armour Inc (NYSE:UAA).
Now there is an exchange traded fund for that.
The ProSports Sponsors ETF (BATS:FANZ) debuted Tuesday courtesy of SportsETFs, LLC. FANZ follows the ProSports Sponsors Index, a benchmark dedicated to the performance of the official corporate sponsors of the major professional American football, basketball, baseball, and hockey leagues, according to a statement from California-based ProSports Sponsors.
The new ETF holds 66 stocks.
Compelling Data
The index FANZ tracks is equally weighted and features exposure to sectors including consumer discretionary, information technology, financials, energy and healthcare.
Typically, as large cap companies, the companies involved in these partnerships have enough free cash flow to afford a league sponsorship or broadcasting rights, said ProSports Sponsors. On a compound annual growth rate, in North American sports the media rights alone are projected to increase by 5.5 percent to $21.3 billion through 2020, and sports sponsorships by 3.9 percent to $18.7 billion, according to PwC's Sports Outlook.
What May Be Missing
As highlighted in the press statement, the index FANZ tracks focuses on the performance of the official corporate sponsors of the major professional American football, basketball, baseball, and hockey leagues. While the ETFs holdings weren't available on the fund's homepage at time of writing, it seems the index and the ETF aren't highly exposed to the U.S. sport that's perhaps the most corporate: NASCAR.
That means FANZ may not hold stocks such as Monster Beverage Corporation (NASDAQ:MNST), The Coca-Cola Co (NYSE:KO) and Lowe's Companies, Inc. (NYSE:LOW), which are among the big-name U.S. companies with direct ties to NASCAR.
FANZ charges 0.69 percent per year, or $69 on a $10,000 investment.
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