Fund issuer Volatility Shares Trust has filed paperwork with the Securities and Exchange Commission to launch a separate exchange-traded fund tied to each of the NHL's 32 teams.
On Saturday afternoon, it was revealed that fund issuer Volatility Shares Trust had filed the official regulatory paperwork with the SEC that would see them look to create 32 standalone exchange-transfer funds (ETF's) for all of the NHL's franchises.
The decision was broken down a bit deeper by Bloomberg Senior ETF analyst Eric Balchunas on X:
New filing for NHL hockey ETFs from VolShares, which will track the performance of 32 dif teams (eg the Boston Bruins ETF) which will be based on how the team does (eg wins, losses in reg season and playoffs) using a special team index calc that has futures contract on it.
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Tim McCourt, Senior Managing Director and Global Head of Equities, FX and Alternative Products at CME Group explained further:
Financial institutions, companies and individuals rely on the transparency and infrastructure of CME Group to hedge across all investable asset classes.
Our CME FSPI Hockey futures will provide a capital-efficient way for fans, sponsors, broadcasters, third-party arena operators, retailers, food and beverage vendors and others to navigate the risk associated with the performance of each NHL team.
The CMI FSPE Scoring Index Behind the Maple Leafs fund
Bear with us here as we go into a bit of a deeper dive into economics and the stock market as a whole.
The proposed Maple Leafs ETF would not give investors any ownership in the team or MLSE. Instead, the fund would seek exposure to futures contracts tied to a FutureSports performance index that rises or falls with officially reported Maple Leafs game statistics.
The SEC filing goes into further detail, explaining how 55 different factors will play into how the index fluctuates, though it did not go into specifics beyond wins, losses, and ties (or OT in the NHL's case):
The Maple Leafs Index is based on fifty-five statistical measures of performance and results of team games (wins, losses and ties) that results in continuous, live statistical values that underpin the value of the Maple Leafs Index which is calculated into a trackable and tradable number.
Also to note, other teams and their fluctuating indexes do not affect Toronto's value and it is strictly based off their results.
Performance futures vs. sports betting and equity
Being as transparent as possible, this is for all intents and purposes - gambling. However, it's a little more complicated than simple sports betting.
.The concept will feel familiar to sports bettors because returns would be influenced by team performance, but the structure is different. This would be a regulated financial product using futures tied to a sports-performance index rather than a conventional sportsbook wager.
You aren't investing $10,000 into Auston Matthews scoring a goal, or for the over/under on total shots, but instead a long-term commitment that will see you gain or lose based off an entire team effort.
Also keep in mind, this is all separate from Rogers. So any additional revenue or metrics they hit won't matter to that ETF value. That also makes the proposed fund completely different from owning Rogers shares because Rogers' stock can move because of its broader telecom, media and business performance.
To note as well, there are 48 separate risks associated with investing in these ETFs which are a lot of financial jargon but also explicitly state the risks associated with a professional sports team such as:
- Player health, competitive dynamics, coaching decisions, and random variation in athletic performance.
- The performance of opposing teams, referee calls, random puck bounces, weather affecting travel, and in-game injuries.
- Chemistry issues, unexpected injuries to key players, player slumps, or tactical mismatches against divisional opponents
- Extended losing streaks
If investors were to place their money in the hands of the Maple Leafs, it would be a lucrative yet potentially volatile situation given how the NHL regular season and playoffs typically play out - which is to say no one knows how.
For Leafs fans, the novelty is obvious: wins and losses could eventually affect something sitting inside a brokerage account.
But the filing also makes clear that the product would carry unusual risks because injuries, losing streaks and even in-game events could feed directly into the performance index underlying the fund.
Do you think the Maple Leafs should be represented on the stock exchange with an ETF?
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