Exchange-traded funds, or ETFs, offer investors the opportunity to dabble in sectors that have an interest in with a modest investment. ETFs are pooled investments, like mutual funds, that offer investors diversification because stocks are bundled together.
For instance, anyone who enjoys video games and wants to try their hand at investing in stocks and securities in the gaming sector, they should consider the Wedbush ETFMG Video Game Tech ETF.
This ETF’s top 10 holdings include Roblox, GameStop, Nintendo, Activision Blizzard, Stillfront, Take-Two Interactive, International Games System, Krafton, SciPlay and Bilibili.
|GAMR||ETF MANAGERS TRUST WEDBUSH ETFMG VIDEO GAME TE||56.97||-0.23||-0.41%|
Why and how does an ETF allow a person to invest in a market sector that they are interested in?
Thematic ETFs like GAMR allow an individual or portfolio manager to focus on the growth of a specific market segment utilizing the knowledge and expertise of analysts that focus on the specific theme of interest, said Bryan Masucci, a director at ETF Managers Group based in San Diego.
For example, according to Masucci, GAMR is designed to capture the various elements and types of companies that collectively represent the video game technology market segment.
"From chip creators to software [game] developers, from large cap to small cap, the companies must meet a set of criteria for inclusion in the index and then weighted in a way to create the most pure-play index staying true to the overall theme," he said.
Has the pandemic affected the popularity of gaming?
Masucci said that video games were already popular before the pandemic in many forms, from console and PC to mobile gaming.
"We all have a gaming console in our pocket; the shelter-in-place orders offered the opportunity in the form of more time and frankly boredom that needed to be alleviated," he added. "Gaming filled a void for kids and adults alike. Unable to go out and socialize, video games offered the opportunity to connect with friends for a shared experience, working together to accomplish a common goal."
How to make the leap to try an ETF if you’re a new buyer?
If you’re interested in purchasing the GAMR ETF because of your interest in video games and the gaming industry overall, do your research. "Buy with conviction," recommends Masucci. He points out that charts are referenced regularly that prove investing is about time in the market rather than timing the market.