Roundhill Investments is shuttering its Pro Sports, Media and Apparel ETF (NYSE: MVP) just over a year after its launch, because the stock fund failed to gain traction among investors. The company announced the sports fund will be liquidated April 8, along with another ETF focused on streaming services.
“Effectively the funds in both cases failed to gather meaningful assets under management and at current levels are loss-making to the firm,” said Roundhill co-founder Will Hershey in a phone call. “That combined with current market conditions led us to decide to close them, in conjunction with our board.”
MVP jumped into the hotly competitive ETF game in March of 2021, quickly gathering $9 million in assets its first three weeks of operation, according to net fund flow data from ETF.com. However, the prolonged bear market in sports stocks affected performance and with it investor interest. The sports ETF lost nearly 19% of its share value the past year and it shuts with less than $4 million in assets, which will be returned to investors. A rule of thumb in the fund industry is that an ETF needs to have $50 million in assets to be viable.
Unaffected by the news Is Roundhill’s sports betting ETF, known by its ticker BETZ.
“This will allow for us to focus on our existing product suite which remains, like BETZ—and it’s March Madness,” said Hershey. BETZ has $212 million in assets, even though its performance has actually been worse—down 34%—than the broader sports fund over the past year, as Wall Street has shied away from growth stocks and sports betting over valuations and general market turmoil.
The MVP fund had higher hopes, obviously. In a December investor presentation the fund pitched its ability to tap into sports teams and related businesses as “premium, scarce assets that have a strong record of value appreciation.” The global sports market is seen growing to $626 billion by 2023, up from $471 billion in 2018, according to the pitch deck. The fund’s top holdings are Formula One, the Atlanta Braves, German soccer club Borussia Dortmund and MSG Sports.
The Sportico JohnWallStreet Sports Stock Index, focused on U.S. traded stocks, is down 19% over the past 52 weeks, even after having a bounce-back month in February.