What is the ESPO ETF used for?
The ESPO ETF invests in the world’s largest companies involved in global video game development, eSports, related hardware, and software by aiming to track the performance of the MVIS Global Video Gaming and eSports Index.
If an investor is bullish on the gaming sector, the ESPO ETF could form part of a tactical allocation. It offers unique exposure to the world’s largest companies, in addition to the added benefit of geographic diversification.
Keep an eye on FUM
The VanEck ESPO ETF had $79.85 million of money invested when we last pulled the monthly numbers. With a funds under management (FUM) or ‘market cap’ figure of less than $100 million, it’s important to consider if this ETF is still too small.
We say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). This is because if an ETF is too small, it may not be sustainable for an ETF issuer/provider, such as VanEck, to continue to operate it.
That said, there are exceptions to this rule of thumb, especially if the ETF issuer is committed to growing the ETF’s FUM to the point where it becomes profitable.
Fees and costs for investors
VanEck charges investors a yearly management fee of 0.55% for the ESPO ETF. This means that if you invested $2,000 in ESPO for a full year, you could expect to pay management fees of around $11.00.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.5% or around $10.00 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Summary
These are just some of the considerations or factors you would need to look at when weighing up the ESPO ETF. Before doing anything, take a look at our VanEck ESPO report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.
So how can you actually invest in the ESPO ETF? In the month of April 2024, you can buy the ESPO ETF and get free brokerage with Pearler. All you have to do is buy and hold the ETF for 12 months! You can invest as little as $500. To buy ESPO for free click here to go to Pearler and sign up (hint: it’s also free to get an account).