Roundhill Video Games ETF

Roundhill Video Games ETF (NERD) is a fund whose adviser, rather than an index, picks about 40 video game stocks, led by NetEase, Electronic Arts and Nintendo as of June 30, 2026. Its 0.50% expense ratio (annual fee) ties Global X's HERO for the lowest of seven gaming funds compared. It is small, at about $14 million in net assets on that date, and prone to big swings: it lost 43.5% in 2022.

• Over the year to Oct 27, 2026, NERD returned -15.9%, 4th of 7 among similar funds.
• Its 5-year annualized return was -2.5%.
• In the 2020 COVID crash it fell 24.9% and regained its old high 1.3 months after the low.
• Its worst full calendar year was 2022 (-43.3%); its best was 2020 (+89.7%).
• The deepest fall in its price history was 65.6% (Feb 16, 2021 to Oct 14, 2022), not yet recovered.

As of Jun 30, 2026, the fund held 40 securities; the ten largest made up 64.67% of assets. It also reported 11.97% in a money-market fund, most likely cash collateral from lending out shares rather than uninvested money.

• Over the three months to Jun 30, 2026, investors withdrew a net $998K (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +2.80%, -3.12%, -1.96%.

NERD is actively managed: rather than tracking an index, its adviser, Roundhill Financial, Inc., picks the holdings. Normally at least 80% of net assets go into video game companies: publishers, developers and distributors of games, plus online gaming and esports services. Eligibility depends mainly on the Bloomberg Industry Classification System (BICS), which considers each company's main source of revenue. Many such firms fall in the Entertainment Industry, where the fund expects to invest over 25% of net assets.

Companies generally need a market capitalization (total stock market value) of at least $500 million. The adviser then screens for how easily shares trade, relevance to video games and investability, aiming for about 25 to 75 holdings. Weights are based mainly on market cap, trimmed so no single stock grows too large. It resets weights at least quarterly, when each holding must be worth at least $250 million. As of June 30, 2026, NERD held 40 stocks, with 64.7% in the top 10.

NERD can own foreign and emerging-market stocks, directly or through depositary receipts (certificates representing foreign shares). It is non-diversified, so it can hold bigger stakes in fewer companies. When large traders redeem shares, the fund may pay them in cash rather than stock. Raising that cash can mean realizing capital gains, which may reach holders as taxable distributions.

• NERD charges 0.5% a year, versus an average of 0.59% for the similar funds below (1st of 7, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $51 in the first year and $628 over 10 years (assuming a 5% annual return).

It is a non-diversified bet on one industry that has fallen as much as 65.6%, so it fits as a small add-on rather than a foundation.

NERD could add a focused stake in video game makers, mostly outside the US, but it swings hard. Launched in 2019, it missed 2008. In the 2020 COVID crash it fell 24.9%, then regained its peak by April 29, 2020. The 2022 downturn cost 46.4% from January to September and took about 32 months to recover; 2022 was its worst calendar year (-43.5%). Its deepest drop, 65.6% from February 2021 to October 2022, was unrecovered as of October 27, 2026. Anyone cashing out shares in 2022 would have locked in heavy losses.

Income is small: a 0.66% yield as of October 27, 2026, paid once a year. The 0.50% fee, below the 0.59% average for similar funds, comes to $51 in year one on $10,000 in the SEC's standard example. Past results don't predict the future, and a plan should weigh the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.