Many of the new exchange-traded funds coming to market this year fit the bill as thematic funds and some are finding immediate success. Both traits apply to the Roundhill Sports Betting & iGaming ETF (NYSE:BETZ).
What Happened: Underscoring the virtues of addressing the right the theme, good timing and, of course, investor demand, BETZ joins the $100 million in assets under management club less than three months after coming to market.
To be precise, the fund has $101 million in assets as of Aug. 31. BETZ tracks the Roundhill Sports Betting & iGaming Index.
"That index the first index globally designed to track the performance of the sports betting and iGaming industry,” according to New York-based Roundhill Investments. “The Index consists of a tiered weight portfolio of globally-listed companies who are actively involved in the sports betting & iGaming industry. This classification includes (i) companies that operate in-person and/or online sports books (ii) companies that operate online/internet gambling platforms and (iii) companies that provide infrastructure or technology to such companies in (i) or (ii).”
Why It's Important: The writing was on the wall for BETZ success and not simply because it's the first ETF addressing the rapidly growing sports betting market, but that first-mover advantage does help.
BETZ rapidly gained traction, including among young investors, an impressive feat when considering that when it debuted, offerings for sports bettors were highly limited due to the coronavirus shutdown. In other words, BETZ joined the $100 million club when for roughly two of the three months of it's been on the market, there was no MLB, NBA or NHL for American gamblers to wager on.
Importantly, BETZ is also delivering the goods in terms of performance, including hitting a new high last Friday.
“In addition to significant inflows, the fund has benefited from strong performance, increasing 31.60% (NAV) and +31.73% (market) since launch on 6/4/2020,” according to Roundhill.
What's Next: Adding to the case for BETZ is its ability to, in a short period of time, adjust to compelling trends. Although it's home to just 37 stocks, BETZ is diversified at the theme level, touching the bases of sportsbook operators, technology providers, iGaming names and traditional land-based casino firms.
The best is probably yet to come for BETZ because sports betting could be a $20 billion industry by 2025 and iGaming could be approaching $10 billion by the same year, meaning there's a long runway for growth with this ETF.