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Dreaming Of Streaming? Upcoming Roundhill Tech ETF Is For Real

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Dreaming Of Streaming? Upcoming Roundhill Tech ETF Is For Real

It's been more than 18 years since the Netflix (NASDAQ: NFLX) initial public offering. From 2010 through 2019, the streaming entertainment pioneer was the best-performing member of the S&P 500.

As that decade dominance confirms, streaming entertainment is growing in a big way. Perhaps it's time for an exchange-traded fund dedicated to that theme. Roundhill Investments is planning to serve that niche.

What's Going On: The New York-based ETF issuer filed plans for the Roundhill Streaming Services & Technology ETF, which will be traded on the New York Stock Exchange under the ticker “SUBZ.” A Roundhill filing with the Securities and Exchange Commission confirms SUBZ will carry an annual fee of 0.75%, or $75 on a $10,000 investment.

The combination of a ticker, listing exchange and expense ratio in a filing for a new ETF can be signs that launch is imminent though the SUBZ filing doesn't include a listing date.

Why It's Important: SUBZ continues the Roundhill tradition of aptly tickered ETFs, including the Roundhill BITKRAFT Esports & Digital Entertainment ETF (NYSE: NERD) and the Roundhill Sports Betting & iGaming ETF (NYSE: BETZ).

More importantly, SUBZ will be the first ETF dedicated to streaming stocks and first mover advantage is often important in the world of ETFs, particularly with thematic funds. Adding to the relevance of SUBZ is the sheer growth of the streaming industry.

“Revenue in the Video Streaming (SVoD) segment is projected to reach US$51,617 billion in 2020,” according to Statista. “Revenue is expected to show an annual growth rate (CAGR 2020-2025) of 10.7%, resulting in a projected market volume of US$85,735 billion by 2025.”

As consumers move away from linear television, SUBZ has a long runway for growth.

“Subscription TV revenue of US$94.2bn in 2019 will contract at a -2.9% CAGR to US$81.4bn by 2024, due to a mature market and cord-cutting, largely resulting from wide acceptance and demand for SVOD platforms as well as competition from vMVPD offerings,” according to PwC.

What's Next: As for what's next, the easy answer is bringing SUBZ to market. The fund will be actively managed, a departure from the aforementioned Roundhill ETFs, which are index-based strategies.

The SUBZ SEC filing doesn't mention specific holdings in the upcoming ETF, but it's reasonable to expect Netflix and Roku (NASDAQ: ROKU) will be part of the new fund's roster.

Other familiar names in that could find their way into SUBZ include Spotify (NYSE: SPOT) and fuboTV (NYSE: FUBO).

 

Related Articles (FUBO + BETZ)

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