Given the advanced development of Japan's anime and gaming industry, are there any index funds (ETFs) specifically investing in this sector?

Hello! It's great to chat with you about this topic. That's an excellent question you asked. Many people are interested in Japan's anime and gaming industry and want to know how to invest in it comprehensively.

Regarding your question, the answer might be a bit different from what you expected.

Bottom Line Up Front: No "Pure" Japanese Anime & Gaming ETF

Honestly, there is currently no index fund (ETF) that invests 100% exclusively in Japanese anime and gaming companies on the market.

This might sound a bit disappointing, but the reasons are quite understandable. Think of an ETF as a "themed bundle," like a "tech bundle" or a "healthcare bundle." For an ETF to be successfully launched and operated, its "theme" can't be too narrow. Otherwise, it includes too few companies, making it difficult to scale, which isn't cost-effective for the fund provider. While "Japanese anime + gaming" seems like a broad category to us, to financial product developers, it might still be considered a bit too "niche."

But don't lose heart! While that "perfect" option doesn't exist, we have several very close alternatives that allow you to easily invest in this sector.

Alternatives: How to Invest Indirectly

Here are a few of the most popular investment approaches. You can choose based on your preference.

Option 1: Invest in a "Japanese Pop Culture" ETF (The Closest Match)

This is the option that best fits your needs. Japan has a very famous ETF that can be seen as a bundle of "Cool Japan" or "Japanese Pop Culture."

• ETF Name: Global X Japan Cool Japan ETF
• Ticker: 2640.T (Listed on the Tokyo Stock Exchange)

This ETF is like a basket containing not just anime and gaming companies, but also other companies representing the "Cool Japan" concept, such as:

• Gaming Giants: Nintendo, Bandai Namco, Capcom
• Anime/Publishing/Toys: Kadokawa, Toei Animation, Kotobukiya
• Other Related: Some karaoke chains, trendy retailers, etc.

Pros:

• Highly Relevant: This is the Japanese ETF most closely aligned with the anime/gaming theme you'll find.
• One-Click Bundle: Saves you the time and effort of researching and picking individual companies.

Cons:

• Not Pure: Includes some non-anime/gaming companies.
• Requires Access to Japanese Stocks: You'll need an account with a broker that allows investing in Japanese equities (e.g., some international brokers).

Option 2: Invest in "Global Gaming" ETFs

If you're not fixated on "purely Japanese," investing in global gaming industry ETFs is also an excellent choice. Since the Japanese gaming industry is globally significant, Japanese companies will hold a high weighting in any global gaming ETF.

• ETF Example 1: VanEck Video Gaming and eSports ETF (Ticker: ESPO)
• ETF Example 2: Global X Video Games & Esports ETF (Ticker: HERO)

Both are well-known gaming ETFs listed in the US. In their holdings, you'll find:

• Japanese Companies: Nintendo, Sony, etc.
• US Companies: Activision Blizzard, Electronic Arts (EA), Nvidia (provides graphics cards).
• Chinese Companies: Tencent, NetEase.

Pros:

• Global Diversification: Don't put all your eggs in one basket; benefit from the growth of the global gaming industry.
• Concentration of Giants: Essentially includes all the top global gaming companies.
• Easy to Buy: Very convenient to purchase if you have a US stock trading account.

Cons:

• Not Purely Japanese: Your investment will be spread across companies from other countries like the US and China.

Option 3: "DIY" – Buy Individual Stocks Directly

If you have particular preferences or have researched specific companies, you can absolutely build your own "anime/gaming portfolio."

This is like going to a conveyor belt sushi restaurant and picking exactly the pieces you want, instead of ordering a set meal.

Some representative companies to consider:

• Nintendo (7974.T): The king of gaming, owner of top IPs like Mario, Zelda, and Pokémon.
• Sony (6758.T): Owner of the PlayStation platform, also a giant in music, film, and anime (Aniplex).
• Bandai Namco (7832.T): Major player in game adaptations and merchandise for anime IPs like Gundam, Dragon Ball, and One Piece.
• Capcom (9697.T): Developer of Resident Evil, Monster Hunter, and Street Fighter.
• Square Enix (9684.T): Creator of the two national RPG franchises, Final Fantasy and Dragon Quest.
• Kadokawa (9468.T): Leading Japanese publisher of light novels and manga, also actively investing in anime and games.

Pros:

• Precision Targeting: Can invest 100% in the companies you are most bullish on.
• High Flexibility: Can adjust your holdings at any time.

Cons:

• Higher Risk: Stock price volatility for individual companies is much greater than for an ETF.
• Requires Research Time: Places higher demands on the individual investor.

Summary

Hope this helps clarify your options! Before investing, be sure to consider your goals and risk tolerance. Best of luck with your investments!