Nikko Asset Management today announces the listing of the NikkoAM E-Games Active ETF (the "ETF") on the Hong Kong Exchanges and Clearing Limited (HKEx) on 16 June 2020. The ETF gives investors access to a diversified portfolio of E-Games companies and related businesses, a real investment opportunity in the virtual world.
The E-Games industry is driven by several key disruptive innovations converging to catalyse structural long-term growth drivers. Already, 2.5 billion people are gamers, representing a third of the world's population. The maturing of critical technologies in cloud computing, 4G-5G internet connectivity and micro-payments anchor a strong base to sustain continued growth. As E-Games and streaming media become increasingly accessible through every mobile phone, this will continue to transform how the masses are entertained.
The first actively managed equity ETF in Asia, Nikko AM's newly launched E-Games ETF combines the convenience of real-time pricing and direct trading of an ETF, with the expertise of a fund manager to pick long term winners to ride a structural growth opportunity.
Said Eleanor Seet, Head of Asia ex-Japan, Nikko Asset Management, "The sophistication of Hong Kong investors makes them a ready audience for the concept of active ETFs. In applying this non-traditional approach to a theme that is itself a relatively recent phenomenon and on the cusp of exponential growth, we are pairing two innovations. Our pursuit of progressive solutions to benefit investors is a long term strategy which we believe supports the growth of the asset management industry."
The ETF will invest in a spectrum of companies that will benefit from the growth of the E-Games and E-Sports industry, from game developers, to gaming hardware and software applications, and high-speed telecommunications and streaming infrastructure.
Said Phillip Yeo, Joint Global Head of ETF Business at Nikko Asset Management, "With a total revenue that exceeds the combined revenues of both the movie and music industry, E-Games is the new entertainment medium. Even Netflix concedes that it competes (and loses) against Fortnite more than HBO.
"Active management will help to capture the unique upside potential of promising companies. This has particular significance because of the wide dispersion of equity performance in the e-game thematic segment. In this ETF, our fund managers adopt a high conviction bottom-up approach as part of a stringent investment process for stock selection and portfolio construction."
The NikkoAM E-Games Active ETF is also the first fund in Asia to adopt a variable management fee structure. To create value for investors and to encourage investors to stay invested for the long-term, discounts will be given on the fund's base management fee should the fund returns fall below its target returns.
As of December 2019, the firm's ETF business had grown to over USD 81 billion, representing almost 31% year-over-year growth from USD 62 billion at the end of 2018. Ranked number two in Asia for AUM in the ETF business, Nikko AM is committed to continue the expansion of its ETF footprint leveraging its capability to provide a comprehensive range of ETF products across major asset classes.
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