What the FIFA World Cup Means for ETFs

The FIFA World Cup has always been a spectacle of national pride, athletic drama and of course … billions of dollars in ad revenues.

As the tournament returned to North America this month, investors are increasingly asking not just who will lift the trophy, but how to get a piece of the economic action. Advertisements, streaming subscriptions and travel demand represent a meaningful slice of global consumer spending, not to mention opportunity for American brands to capitalize on new exposure to global consumers, said Jon Clements, managing director and co-founder of MarketDesk.

“Often, the best investment opportunities are found in secondary effects that are less obvious,” he said. “The World Cup is generating a lot of attention around US brands right now.”

New in Town?

You may have seen the memes: traveling sports fans experiencing American goodies for the first time, expressing awe online for treasures like Waffle House and Texas BBQ. That’s driving attention to American brands and opening them up to new demographics. It could also generate interesting signals for momentum investors over the following months, Clements said. 

“You have a lot of global travelers in the US experiencing US brands, everything from Costco to food chains to different retail products that maybe are not available in their local markets,” he said. “Most US companies [already] operate on a very global basis, but I would imagine they’re collecting a lot of important data and information in terms of where there might be interest to expand markets.” 

World Cup matches obviously also create demand spikes in the hospitality, airlines, ticketing platform and consumer discretionary sectors. Some of the largest funds in related themes include:

• The Gabelli Opportunities in Live and Sports ETF (GOLS) holds Manchester United (which has several players currently represented in the cup) and is up 2.97% this year.
• The US Global Jets ETF, which invests in commercial airlines and is up 10.98% over the same period.
• Funds that track host countries at the macro level, like the iShares MSCI Mexico and Canada ETFs (which have the tickers EWW and EWC, respectively) could also benefit. 

Data, Data, Data: Still, it’s going to take some time for the verdict to come in on which brands and regions show the most growth potential, Clements said. “Whether it’s Japanese tourists in Texas falling in love with different elements of US culture, these companies … [are] also collecting a lot more data,” Clements said. “Data is being collected in real time that I think you’re going to see being spoken about on earnings calls over the next two to three quarters.”