## [# ETF Of The Week: Gaming Fund Still Buoyant](/sections/news/etf-week-gaming-fund-still-buoyant)
# ETF Of The Week: Gaming Fund Still Buoyant
The Fortnite Effect is dragging down video game stocks. So why is 'GAMR' still doing relatively well?
[](/contributors/lara-crigger)
[By Lara Crigger](/contributors/lara-crigger)
Feb 08, 2019
Edited by: Lara Crigger
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This week was a tough one for video gaming stocks. Stock prices for several major publishers and developers tanked, after the firms reported disappointing quarterly earnings and expressed grave concerns about their future.
[Electronic Arts (EA)](https://www.etf.com/stock/EA) dropped 15% on Wednesday after missing revenue targets and cutting its annual outlook, while [Take-Two Interactive Software (TTWO)](https://www.etf.com/stock/TTWO) fell 13% after revising its next-quarter forecast to a lower-than-expected level.
EA blamed "intense competition" in the space, especially from the free-to-play category of games, including the smash-hit multiplayer shooter, “Fortnite*.”* Meanwhile, Take Two hit its earnings targets, but also admitted it had plans to pursue a “Fortnite” competitor.
The companies' financial troubles also dragged other video game stocks lower. [Activision Blizzard (ATVI)](https://www.etf.com/stock/ATVI) fell 10% Wednesday (even though it doesn't report earnings until next week). Ubisoft and Nintendo also fell.
Those financial troubles also impacted the $96 million [ETFMG Video Game Tech ETF (GAMR)](https://www.etf.com/GAMR), the largest video game stock ETF. Since Wednesday, GAMR has fallen 3.4%. Year-to-date, however, GAMR remains up 7.9%:
*Source: [StockCharts.com](https://www.stockcharts.com/); data as of Feb. 7, 2019*
**Diversified Portfolio**
GAMR has remained relatively buoyant in the face of such a disappointing earnings season because its portfolio is broader than just video game publishers and developers.
The fund holds a portfolio of 80 stocks broken into various buckets: "pure play" hardware and software developers, "nonpure play" supporting firms and "conglomerates," whose business extends beyond just the video game business. As such, GAMR holds a range of toy companies, internet services and software companies, in addition to its hardware and electronics firms.
Furthermore, only 27% of its holdings are in U.S. companies, mitigating the impact any single American publisher will have on the overall portfolio. Meanwhile, 25% of the holdings are from gaming heavyweight Japan, and another 18% from Korea.
**Competition From VanEck**
For years, GAMR was the only video game ETF on the market. In October, however, the $9 million [VanEck Vectors Video Gaming and eSports ETF (ESPO)](https://www.etf.com/ESPO) launched, with an emphasis on eSports companies.
Even though ESPO is 0.20% cheaper than GAMR, carrying a 0.55% expense ratio, it has yet to draw many assets, possibly because a video game ETF—like many thematic investments—tends to be a high-conviction play, with investors willing to stick out periods of bad performance.
Neither fund is particularly liquid or well-traded, and considering how liquid the underlying stocks are, both funds carry fairly wide spreads (ESPO's is 0.13%, while GAMR's is 0.22%). Interested investors should tread with care.
*Contact Lara Crigger at* [*lcrigger@etf.com*](mailto:lcrigger@etf.com)
[ Lara Crigger ](/contributors/lara-crigger)
Lara Crigger is a veteran financial writer with more than twenty years' experience writing about ETFs, markets, and investor education. Formerly… [View Bio](/contributors/lara-crigger)
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