BlackRock launches online entertainment and education
BlackRock is throwing its considerable heft into European thematics, launching an ETFs that buys in to the swelling online entertainment and education industries.
The iShares Digital Entertainment and Education UCITS ETF (PLAY) tracks the STOXX Global Digital Entertainment and Education Index.
The index targets companies that make over 50% of their revenue from digital media, gaming, digital education, and electronics. FactSet’s RBICS is used to identify the companies.
The index currently holds 81 stocks, which receive equal weighting. An ESG filter is also included, which removes companies involved in arms dealings, environmental controversies, fossil fuels, and some other things.
The fund charges 0.40%.
Bernie’s commentary – a closet metaverse ETF?
Looking through the list of companies this ETF invests in, I can see three buckets: semiconductors, video games, online education companies. There are companies outside these three categories. But these three make up much of it.
Now, STOXX and BlackRock are pitching PLAY as a way to profit from the growth of online entertainment and education. We all saw this theme boom during the covid-19 pandemic. (Covid-19 brought a lot of the growth in online gaming and education forward – and the reopening trade wound it back, however slightly. Yet the trend is clearly structural not cyclical).
Yet I think appearances are deceptive. And what PLAY is really angling at is the metaverse. Why lump online education and entertainment into the same category when they are opposites? Entertainment is what you forgo to pursue education. And if the growth of online entertainment is what the fund wants, why exclude online shopping, its core component? Video games, semiconductors, online education meanwhile are expected to be the big winners of the metaverse.
I have no proof that this is what BlackRock is doing. They may well launch a metaverse ETF proper later down the line. However, if they do think the metaverse risks being vapourware, yet want a piece of the action nonetheless, this is a sensible piece of product building.