Gaming ETF GAMR Rebalance Sees Nvidia, Tencent Rise

A new year brings many opportunities for rebalancing, and the gaming ETF GAMR is no exception. The strategy, investing in companies that drive video games forward, holds just about 20 total constituents in its index, but made some notable adjustments between December and its current weights.

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GAMR, the Amplify Video Game Leaders ETF, will soon celebrate its tenth anniversary of operation. The gaming ETF charges 59 basis points (bps) to track its index, the VGAME VettaFi Video Game Leaders Index. In its near decade of operation the fund has produced some appealing returns. The fund has outperformed its ETF Database Category average over three and one year periods via tracking its index.

Gaming ETF GAMR Rebalances to Take on New Year

How, then, does the fund invest, and what does its index aim to do? VGAME takes a market cap-weighted approach to its investable universe, initially identified via factors like liquidity, size, revenue, and listing. Intriguingly, the index operators apply a banded market cap ranking to its investments into tiers, with the top weighted around 10%, the second around 5%, and the third on 2.5%. 

The index saw some interesting changes in the last month amid that approach, adjusting weights but not dropping or adding any particular holding.  Advanced Micro Devices (AMD) dropped from the highest-weighted stock as of December 19th at 14% weight to 9.5% weight as of January 12th per Amplify ETFs data. In its place, Nvidia (NVDA) saw its stock rise to the highest weight in the index at 10.6%, rising from 10% prior to the rebalance. 

Tencent Holdings (TCEHY) rose from third to second place, rising by 0.2% between December and January 12th. Sea Ltd. (SE) rose in the index’s weightings from 3% to 5.5% between those dates, as well. SE, a tech company based in Singapore, a key player in Southeast Asian commerce. Looking ahead to this year, the gaming ETF could provide an appealing route into the burgeoning video game industry.

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VettaFi LLC (“VettaFi”) is the index provider for GAMR, for which it receives an index licensing fee. However, GAMR is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of GAMR.