SportsETFs has launched the ProSports Sponsors ETF (BATS: FANZ), tracking the performance of US-listed equities of firms which are the official corporate sponsors or broadcasters of the major professional American football, basketball, baseball, and hockey leagues (NFL, NBA, MLB, and NHL respectively).
The ProSports Sponsors ETF (BATS: FANZ) currently tracks 66 companies, each being an official corporate sponsor or broadcaster of a major US sports league.
The fund tracks the ProSports Sponsors Index which currently has 66 constituents and rebalances to an equally weighted distribution at least quarterly – sponsors are rebalanced in March, August, and September, and broadcasters are rebalanced in December. SportsETFs believes this number will increase over time, reflecting an upward trend in league sponsorships.
“FANZ is the first ETF that allows investors and sports fans to participate in the financial relationships between sports leagues and their corporate partners,” said Nick Fullerton, president and co-founder of SportsETFs and president of Fullerton Advisors. “While other products in the market offer strategies that invest in sporting goods or leisure & entertainment, the ProSports Sponsors ETF holds companies that invest in high-profile marketing partnerships that target a specific audience. FANZ can be a core equity position in an investor’s portfolio while also being an exciting way to financially participate in something fans understand and love.”
The thesis is that these 66 companies included are large enough and have enough free cash flow to be able to afford a major sponsorship, and are therefore sound investments. According to PwC’s Sports Outlook, the media rights associated with these leagues are projected to increase by 5.5% per annum to $21.3 billion through 2020, while the cost of sports sponsorships is expected to grow by 3.9% per annum to $18.7bn.
Jim Kozimor, co-founder and chief strategy officer of SportsETFs, said: “Following the investment strategy of the famed portfolio manager Peter Lynch, who said, “invest in what you know,” sports fans now have the opportunity to invest in a diversified portfolio of brands that they recognize in one fund. Our research demonstrates that the typical avid sports fan is a financially responsible individual that has disposable income to spend on sports merchandise, tickets, and TV packages. FANZ seeks to provide them with access to capture the growth opportunities presented by these companies.”
The fund charges fees of 0.69%.