Summer Fun, Serious Thematic ETFs

The MUSQ Global Music Industry ETF (MUSQ) and the Amplify Video Game Leaders ETF (GAMR) have significantly outperformed the iShares MSCI ACWI ETF (ACWI) year-to-date, rising 17% and 22% respectively through early June. MUSQ, with $25 million in assets, offers targeted exposure to the music industry, including streaming, live events, and related technology, while GAMR, with $40 million in assets, taps into the growing video game market, projected to reach $691 billion in revenue by 2029. Both ETFs provide concentrated, thematic exposure, holding a relatively small number of positions across relevant sectors, offering investors targeted exposure beyond broader market indexes.

Analysis

Thematic ETFs focused on the music and video gaming industries have demonstrated notable outperformance in 2025, providing investors with targeted exposure to high-growth sectors. Specifically, the MUSQ Global Music Industry ETF (MUSQ), despite its relatively small asset base of $25 million, delivered a 17% year-to-date return through June 6, significantly outpacing the iShares MSCI ACWI ETF (ACWI) by over 1,000 basis points. MUSQ achieves this through a concentrated portfolio of 27 holdings, including industry leaders like Live Nation Entertainment, Spotify, Universal Music Group, and influential mega-caps such as Apple and Alphabet. Similarly, the Amplify Video Game Leaders ETF (GAMR), with $40 million in assets, surged 22% year-to-date through early June. GAMR offers exposure to a global video gaming market projected to grow from $522 billion in 2025 to $691 billion by 2029, holding 22 positions including Advanced Micro Devices, Microsoft, and Nvidia. Both ETFs serve as examples of how smaller, thematic funds can capture specific long-term trends not fully represented in broader market indexes, though they inherently carry risks associated with thematic investing, such as the potential for themes to lose favor or underperform expectations. VettaFi acts as the index provider for both MUSQ and GAMR.

Key Decisions for Investors

• Investors seeking targeted growth exposure beyond broad market indices could consider allocating to thematic ETFs like MUSQ and GAMR, given their strong recent performance and alignment with expanding sectors such as music and video gaming.
• While the year-to-date returns are compelling, the relatively small asset under management ($25M for MUSQ, $40M for GAMR) and concentrated nature of these ETFs (27 and 22 holdings respectively) may imply higher volatility and liquidity risk, which should be carefully monitored.
• It is prudent to view these thematic ETFs as satellite positions complementing a core diversified portfolio, acknowledging the inherent risk that specific themes can fall out of favor despite current positive momentum and strong industry growth projections.
• Investors should assess the specific holdings within MUSQ and GAMR, such as Apple, Alphabet, Microsoft, and Nvidia, to understand potential overlaps with existing mega-cap exposures and ensure the thematic tilt aligns with their overall investment strategy.