The only pure play streaming ETF was launched on Wednesday by Roundhill Investments.
The company, which is also behind the Roundhill Bitkraft Esports & Digital Entertainment ETF NERD and Roundhill Sports Betting & iGaming ETF BETZ, targets retail traders with unique thematic ETFs.
Roundhill associate Mario Stefanidis joined Benzinga live on Thursday to share details on the new ETF.
New Streaming ETF: The goal of the Roundhill Streaming Services & Technology ETF SUBZ is to capture all the streaming providers across several sectors.
Companies that derive a substantial portion of revenue from streaming services for categories like music, movie and health are included in the ETF.
“We were surprised that there were no other funds globally that just targeted streaming,” Stefanidis said.
The ETF launch comes with streaming being one of the hottest trends in the market and after the successful growth of companies like Netflix Inc NFLX and Disney+ from Walt Disney Co DIS.
The ETF is actively managed, giving Roundhill flexibility to add additional companies based on trends or events.
The flexibility also allows the ETF to allocate positions to companies going public with IPOs prior to a normal quarterly rebalance.
Related Link: Exclusive: BETZ ETF Co-Founder Talks Sports Betting Market, DraftKings, Barstool
ETF Holdings: The fund is made up of 35 holdings. Fifty percent of the ETF is U.S stocks, 25% is Chinese stocks and the rest comes from countries like Canada, India, Japan, South Korea and Sweden.
The two largest Chinese esports streaming companies are featured in the fund: DouYu International DOYU and HUYA Inc HUYA.
Even with the 50% U.S. weighting, Stefanidis told Benzinga that several of the names offer multinational exposure.
“Disney has STAR, one of the largest streaming services in India.”
One name people may not be familiar with in the ETF is J-Stream Inc, which trades in Japan, he said.
“J Stream was the first company in Japan to offer streaming services.”
The company is a holding company with five divisions offering content delivery for companies and also telemedicine. Stefanidis said the company is exclusive to Japan right now, but could expand internationally.
The fund includes popular media streaming names like Netflix and Roku ROKU in its top holdings.
Music streaming stocks like Spotify Technology SPOT and Tencent Music Entertainment Group TME are also in the ETF's top five holdings.
Peloton Interactive Inc PTON could be another surprising addition to the ETF. The company does offer a streaming service to customers, which matches the ETF's thematic approach.
Some cable companies with streaming exposure are included in the ETF.
AT&T Inc T and Comcast Corp CMCSA each have around a 1% allocation on the basis of the HBO Max and Peacock services, respectively.
Selling The ETF: Roundhill is targeting retail traders and was impressed with the day one reception of the ETF, Stefanidis said.
The ETF traded over 1 million shares on the first day it was offered, he said: “We couldn’t be more ecstatic about it.”
The average size order was under 300 shares, Stefanidis said, adding that this shows the ETF's strength with retail investors.
The selling points of the ETF are the continued cord-cutting trend in the U.S. and the global expansion of streaming services.
Pricing power is a key for streaming providers going forward. Stefanidis pointed to Netflix raising the price of its monthly service by $1 and seeing the shares go up in reaction.
The Roundhill Streaming Services & Technology ETF is expected to soon have options for investors to trade as well. The company’s BETZ ETF had options a week after it went public.
Photo courtesy of Disney.
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