The first ETF dedicated to professional sports was launched in March.
Roundhill Investment’s Mario Stefanidis joined “The ETF Show” with Benzinga to discuss the recent launch of the Roundhill MVP ETF MVP.
Pure Play Sports ETF: Stefanidis said Roundhill did a thorough investigation before launching the MVP ETF to make sure there were no existing pure-play options.
“We wanted to be first to market, wanted to be innovative,” Stefanidis said.
Stefanidis said there are no U.S. or global ETF options with pure-play exposure to the sports market.
Holdings: The Roundhill MVP ETF holds companies that own professional sports teams, own professional league, are sports apparel companies, or are plays on sports media rights deals.
The fund’s assets are split with 50% in professional sports teams, 20% in professional leagues and sports arenas and the rest in sports media and SPACS that are searching in the sports field.
The fund is split with 50% exposure to U.S. companies with the remaining 50% represented mainly by Europe.
Madison Square Garden Sports Corp MSGS, Liberty Formula One Group FWONA, Manchester United MANU, Juventus and Borussia Dortmund are the top holdings in the ETF.
“MSG Sports, which owns the Knicks and Rangers, is as pure-play as you can get,” Stefanidis said.
Nike Inc NKE and Adidas ADDYY are both in the top 10 holdings and Stefanidis told Benzinga more apparel companies could be added later on.
The Roundhill MVP ETF also holds around five SPACs that make up about 10% of assets. None of the SPACs have announced deals, but have specifically said they are targeting the sports market.
Growth Ahead: When asked about the growth of the sports industry, Stefanidis highlighted the growing valuations of sports teams and increased media rights deals.
“We’re only seeing their value go up,” Stefanidis said, pointing to the recent $5.5 billion valuation of the NBA's Golden State Warriors. Also, the media rights for the NFL rose over 100% in the last decade.
The ETF offers a good basket of companies that could benefit as part of the reopening trade, Stefanidis said. International growth of teams and media rights could be another catalyst for several sports leagues and holdings in the ETF.
“I think that’s a sport that has appeal in China,” Stefanidis said of Major League Baseball.
The NFL and NBA are watched by a large domestic audience and could increase revenue with further international reach.
NFTs: Investing in individual athletes could be years away, but the growth of NFTs has made the digital assets of athletes more accessible to collectors.
“I think NFTs pose an interesting concept,” Stefanidis said.
Juventus, which is a top-five holding, was one of the first teams to explore NFTs last year, Stefanidis told Benzinga. The growth of NBA Top Shot could lead to other leagues replicating the model down the road.
“I think some of the names in MVP are going to start adopting NFTs as part of merchandising efforts.”
Fans want one-of-a-kind collectibles. The Roundhill MVP ETF offers some exposure to non-fungible tokens with its professional sports team holdings.
(Photo: Joaquin Chueca Cia/Flickr)
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