Harvest Digital Sports & Entertainment Index ETF

You Watch, Play And Wear Them, Now You Can Invest In Them

Sports & Entertainment have the power to excite, inspire and unite people. The industry is diverse and dynamic and well positioned to gain pace across the world. Fans are passionate about their teams, gamers spend hours playing, and modern day consumers can bet on their favorite teams with improved graphics, gameplay and overall experience from anywhere or at fantasy sports venue. Sport brand owners are prodigious marketing machines, reaching massive audiences with new ways to boost year round engagement and maximize revenue streams. The digital generation has brought in wave after wave of new opportunities, like eSports and eGaming, both of which have developed at exponential rates. As world conditions improve post-covid, we believe the Sports & Entertainment sector is primed for game-changing trends.

ETF Key Facts

TICKER

HSPN

TSX
CUSIP

41756K105

CDS
CURRENCY

CAD

Unhedged
INCEPTION DATE

Nov. 05

2021
HOLDINGS

40

Total Number

MGMT. STYLE

Index

Passive
SECURITY WEIGHT

Equally

Weighted
REBALANCE

Quarterly

Portfolio
MGMT. FEE

0.50%

Annual
DISTRIBUTIONS

Annually

if any

TICKER

HSPN.U

TSX
CUSIP

41756K204

CDS
CURRENCY

USD

Unhedged
INCEPTION DATE

Nov. 05

2021
HOLDINGS

40

Total Number

MGMT. STYLE

Index

Passive
SECURITY WEIGHT

Equally

Weighted
REBALANCE

Quarterly

Portfolio
MGMT. FEE

0.50%

Annual
DISTRIBUTIONS

Annually

if any

Investment Objective

The Harvest Digital Sports & Entertainment Index ETF primarily invests in securities that are engaged in the development of products and services related to the sports & entertainment industries: iGambling, eGaming, sports equipment & apparel, event bookings & entertainment and professional sports that are listed on a regulated stock exchange in North America and select global developed markets. The portfolio is reconstituted and rebalanced quarterly back to equal weights. The ETF tracks the Solactive Sports & Entertainment Index.

Michael Kovacs

President & CEO

Harvest ETFs

HSPN Q&A

Harvest Portfolios Groups Ltd. has launched the Harvest Digital Sports & Entertainment Index ETF (TSX:HSPN) to take advantage of the attractive dynamics of this sector. In an interview, Harvest CEO Michael Kovacs discussed the ETF, the sector’s outlook and how the ETF aligns with the Harvest philosophy of creating value through ownership of the best global businesses.

Q1: Why did you launch the Harvest Digital Sports & Entertainment Index ETF?

Sports entertainment is a global industry with great growth characteristics. It is regaining a foothold after more than a year of empty stadiums and lost revenues. At the same time, there have been bright spots, including new forms of sports entertainment such as online gaming and internet gambling where the pandemic has been a catalyst.

At Harvest, we seek to identify trends like this. Sports is one that continues to grow globally and also offers reopening opportunities as the pandemic issues decline.

Q2: How is the ETF designed?

It is passively managed ETF with 40 global stocks that follows the Solactive Sports & Entertainment Index. The companies are publicly traded, mostly in North America, with some in Europe. The ETF is diversified across five areas of the sporting world, with different weightings for each area. It is rebalanced quarterly.

Q3: What is the strategy?

As mentioned, the ETF is diversified to capture all segments of the industry. Professional sports organizations make up five of the 40 holdings, or 12.5%. There are a number that either trade under their own name or as part of companies that own them.  The English soccer team Manchester United Plc is one example. It is one of the game’s strongest brands. It is listed in New York and has a market capitalization of about US $2.7 billion. Another example is Liberty Media-Liberty Formula One. which trades on Nasdaq. It owns the Formula 1 racing and has a market cap of US $18 billion. Madison Square Gardens Sports Corp.  is another. It owns the New York Rangers of the NHL and the NBA’s New York Knicks. It has a market cap of US $4.5 billion. These are examples of some of the great sporting franchises out there.

Q4: Are event and ticket companies and sports equipment and apparel companies another component?

Yes, they are. Together they are about 38% of the ETF. Ticketing makes up five holdings or 12.5%. There are a lot of companies that people would recognize. Live Nation Entertainment Inc. owns the familiar ticketing company, Ticketmaster.  Live Nation is   a global company that manages ticket sales and resales and also owns and operates entertainment venues and manages careers.  In fact, they own and operate several of the premier venues that many Canadians have attended concerts and events.

Sports equipment and apparel is another 10 holdings or 25% of the ETF. Again, many of the companies are household names. Nike Inc. is a global leader in the manufacture and marketing of athletic shoes, branded clothes and equipment. It also sells baseball bats and balls, tennis rackets and golf clubs. Nike’s annual revenues are more than US $18 billion. Adidas which is the second largest global sports apparel company after Nike, owns Reebok and part of the German soccer club Bayern München. Cross ownership like this gives these companies incredible brand power.

Q5: Why are you most excited by online gaming and internet gambling?

It's a fast-growing area. Twenty companies in the ETF (50%) are from these segments. Many weren’t around 10 years ago and some are now half a billion-dollar organizations. For example, just recently, Florida has decided to allow internet gambling on sports teams. I think that brings to 28, the number of US states that allow internet gambling and sports betting.

There’s lot of growth especially in Asia.  According the analytic company Statistica, the online gaming market was worth US $21 billion in 2020, a 22% increase from the previous year. This was due to stay-at-home COVID trends, but it gives you an idea of the potential. According to newzoo, consumers under the age of 40 average 7 hours of game time per week with nearly 80% of Gen Z and Millennials are actively engaged in gaming.  eGaming is a fast-growing area that not only encompasses the software & game developers, equipment & analytics, but also includes competitive eGaming teams all around the world and large and growing viewership base. The total eGaming audience in 2020 was 1 billion people, with China, South Korea, and Japan having the biggest online gaming audiences.

Q6: How is the Harvest Digital Sports & Entertainment Index ETF different?

HSPN is a diversified investment across the major subsectors of the Sports & Entertainment Industry. It is a growth investment and should be positioned as such.

Sports entertainment is a global industry with strong growth characteristics. In many areas it is regaining its foothold after more than a year of lost revenues associated with fewer people in the stadiums and arena’s. However, amidst the pandemic, the franchises of sports teams have accelerated other avenues of growth through media, sponsorships, merchandise and digital content that have positive impacts across multiple sub-sectors directly linked to sports and entertainment industries. At the same time, there have been other bright spots, including new forms of sports entertainment such as online gaming and internet gambling where the pandemic has been a catalyst.

At Harvest, we identify trends like this. Sports is one that continues to grow globally and offers reopening opportunities.

Exposure to Growth Sectors with Near Term Catalysts

Why Invest in HSPN

  • 40 dominant companies exposed to sports & entertainment industries
  • Tracks the Solactive Sports & Entertainment Index
  • Long term growth in eGaming & iGambling
  • Established manufactures of sporting goods & equipment
  • Exposure to technological disruption in event bookings & entertainment
  • Unique thematic exposure towards professional sports teams
  • Available in two currency classes: Canadian & US dollar

ETF Quick Facts

As at November 30, 2021
Quick ETF FactsClass AClass U
TSX CodeHSPNHSPN.U
CUSIP41756K10541756K204
CurrencyCADUSD
Inception Date**2021/11/052021/11/05
Number of Holdings40
Security WeightEqually
Management StylePassive Index
RebalanceQuarterly
Management Fee0.50%
Risk RatingHigh
** Pending final TSX approval.

Sports Betting Growth Driven by Regulatory Tailwinds

Sources: Activate Consulting, Technology & Media Outlook 2021, October 2020, Harvest Portfolios Group Inc.

HSPN Index Methodologies

The Harvest Digital Sports & Entertainment Index ETF has been designed to replicate, to the extent possible, the performance of the Solactive Sports & Entertainment Index TR (the “Index”), net of expenses. The ETF intends to invest in and hold the Constituent Securities of the Index in the same proportion as they are reflected in the Index.

The Solactive Sports & Entertainment Index primarily includes issuers that are engaged in the development of products and services related to Sports Equipment & Apparel, iGambling, eGaming, Event Bookings & Entertainment and Professional Sports and related issuers that are listed on a regulated stock exchange in North America and select global developed markets.

HSPN Sector Allocations*

As at November 30, 2021
iGambling
NameTickerWeightSectorCountry
International Game Technology PLCIGT US3.6%iGamblingUnited States
Rush Street Interactive, Inc.RSI US3.3%iGamblingUnited States
Churchill Downs IncorporatedCHDN US2.9%iGamblingUnited States
MGM Resorts InternationalMGM US2.7%iGamblingUnited States
Caesars Entertainment, Inc.CZR US2.4%iGamblingUnited States
Bally's CorporationBALY US2.3%iGamblingUnited States
Penn National Gaming, Inc.PENN US1.8%iGamblingUnited States
Esports Entertainment Group, Inc.GMBL US1.7%iGamblingUnited States
GAN LimitedGAN US1.7%iGamblingUnited States
DraftKings Inc.DKNG US1.6%iGamblingUnited States
eGaming
NameTickerWeightSectorCountry
NetEase, Inc.NTES US3.4%eGamingUnited States
Take-Two Interactive Software, Inc.TTWO US3.0%eGamingUnited States
GameStop Corp.GME US2.8%eGamingUnited States
Turtle Beach CorporationHEAR US2.7%eGamingUnited States
Electronic Arts Inc.EA US2.5%eGamingUnited States
Sea LimitedSE US2.4%eGamingUnited States
Media and Games Invest SEM8G GR2.3%eGamingGermany
Corsair Gaming, Inc.CRSR US2.2%eGamingUnited States
Gravity Co., Ltd.GRVY US2.2%eGamingUnited States
Activision Blizzard, Inc.ATVI US2.1%eGamingUnited States
Sports Equipment & Apparel
NameTickerWeightSectorCountry
NIKE, Inc.NKE US3.0%Sports Equipment & ApparelUnited States
Columbia Sportswear CompanyCOLM US2.8%Sports Equipment & ApparelUnited States
Super Retail Group LimitedSUL AU2.8%Sports Equipment & ApparelAustralia
Yue Yuen Industrial (Holdings) Limited551 HK2.4%Sports Equipment & ApparelChina
adidas AGADS GR2.3%Sports Equipment & ApparelGermany
Technogym S.p.ATGYM IM2.2%Sports Equipment & ApparelItaly
Nautilus, Inc.NLS US1.9%Sports Equipment & ApparelUnited States
Zepp Health CorporationZEPP US1.8%Sports Equipment & ApparelUnited States
Peloton Interactive, Inc.PTON US1.3%Sports Equipment & ApparelUnited States
Event Bookings & Entertainment
NameTickerWeightSectorCountry
Live Nation Entertainment, Inc.LYV US3.5%Event Bookings & EntertainmentUnited States
PIA Corporation4337 JP3.0%Event Bookings & EntertainmentJapan
CTS Eventim AG & Co. KGaAEVD GR2.8%Event Bookings & EntertainmentGermany
Eventbrite, Inc.EB US2.6%Event Bookings & EntertainmentUnited States
LiveOne, Inc.LVO US1.6%Event Bookings & EntertainmentUnited States
Professional Sports
NameTickerWeightSectorCountry
Liberty Media CorporationFWONA US3.6%Professional SportsUnited States
Madison Square Garden Sports Corp.MSGS US2.7%Professional SportsUnited States
Manchester United PLCMANU US2.6%Professional SportsUnited States
Borussia Dortmund GmbH & Co. KGaABVB GR1.9%Professional SportsGermany
Juventus Football Club S.p.A.JUVE IM1.6%Professional SportsItaly
Juventus Football Club S.p.A. RightsJUVEAA IM0.3%Professional SportsItaly

Explore Featured HSPN Companies

FORMULA ONE GROUP

The Formula One Group, owned by Liberty Media Corporation, is a an international auto racing league. They make money from tickets, merchandising and sponsorships.

Learn More

DRAFTKINGS INC

DraftKings is an American daily fantasy sports contest and sports betting operator. Users enter contents to bet on performances in five major American sports.

Learn More

LIVE NATION ENTERTAINMENT INC

Live Nation Entertainment, Inc. is an American global entertainment company that was founded in 2010 following the merger of Live Nation and Ticketmaster.

Learn More

ELECTRONIC ARTS INC

Electronic Arts Inc. is a global leader in digital interactive entertainment (video games). Popular EA Games: FIFA Series, Sims, Need for Speed, Madden NFL, Apex Legends Game...

Learn More

ADIDAS GROUP

Adidas designs and manufactures shoes, clothing and accessories. They are the largest sportswear manufacturer in Europe, and the second largest in the world.

Learn More

HSPN in the News

Disclaimer

Harvest Digital Sports & Entertainment Index ETF (formerly Harvest Sports & Entertainment Index ETF)

Commissions, management fees and expenses all may be associated with investing in HARVEST Exchange Traded Funds (managed by Harvest Portfolios Group Inc.). Please read the relevant prospectus before investing. The funds are not guaranteed, their values change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made with guidance from a qualified professional. Certain statements included in this communication constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect", "intend", "will" and similar expressions to the extent they relate to the Investment Fund. The forward-looking statements are not historical facts but reflect the Fund’s, Harvest and the Manager of the Fund’s current expectations regarding future results or events. These forward looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although the Fund, Harvest and the Manager of the Fund believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. The Fund, Harvest and the Manager of the Fund undertakes no obligation to update publicly or otherwise revise any forward-looking statement or information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Solactive Indices
The financial instrument is not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG offer any express or implicit guarantee or assurance either with regard to the results of using the Index and/or Index trade name or the Index Price at any time or in any other respect. The Index is calculated and published by Solactive AG. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards the Issuer, Solactive AG has no obligation to point out errors in the Index to third parties including but not limited to investors and/or financial intermediaries of the financial instrument. Neither publication of the Index by Solactive AG northe licensing of the Index or Index trade name for the purpose of use in connection with the financial instrument constitutes a recommendation by Solactive AG to invest capital in said financial instrument nor does it in any way represent an assurance or opinion of Solactive AG with regard to any investment in this financial instrument.

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