- Metaverse allows people to collaborate, work, play, socialize, and do other things in the virtual space.
- Metaverse is considered the next generation of the internet.
- Metaverse ETFs provide exposure to Metaverse-focused companies.
The metaverse is considered the next generation of the internet. The metaverse concept caught people's imagination after Facebook rebranded itself as Meta Platforms (FB) Inc last year. Many large companies, including startups, are entering the metaverse space. For instance, Alphabet Inc. (GOOG, GOOGL), Microsoft Corporation (MSFT), and Snap Inc. (SNAP) are developing virtual reality products for next-gen internet applications.
The metaverse ETFs may be an excellent way to get exposure to metaverse-focused companies. Metaverse enables people to collaborate, work, play, socialize, and even keep pets in the virtual world.
Also, JPMorgan Chase & Co. (JPM) has created a digital coin using blockchain technology for payments. Likewise, HSBC has opened a lounge in the metaverse, and PayPal Holdings, Inc. (PYPL), Visa Inc. (V), and Mastercard Incorporated (MA) are exploring crypto services.
The following are five metaverse ETFs worth exploring.
Roundhill Ball Metaverse ETF (METV)
Expense ratio – 0.59%
Asset under management (AUM) - US$763.24 million
Average daily volume - US$8.76 million
Total holdings - 45
METV is a passively managed ETF. It invests in metaverse-focused stocks selected by a committee of subject experts. The committee uses criteria such as patent filing, scientific and technology updates, third-party usage data and metrics, executive presentations etc.
The companies are selected based on seven categories: hardware, compute, networking, interchange standards, payments, virtual platforms, and content, assets, and identity services. Each category is capped at 25%.
This ETF was traded under the ticker symbol META before January 31, 2022.
It is an open-ended ETF launched by Roundhill Investment in 2021. It tracks Ball Metaverse Index. It has a market capitalization of US$738.74 million. Its 80% of investment is in the US. The top three holdings are Roblox Corp., NVIDIA Corp., and Meta platforms, with more than an 8% stake.
METV closed at US$11.57 on April 6, 2022.
Fount Metaverse ETF (MTVR)
Expense ratio – 0.70%
Asset under management (AUM) - US$9.18 million
Average daily volume - US$124.70 thousand
Total holdings - 49
MTVR ETF provides exposure to companies developing, manufacturing, distributing, and selling metaverse technology-related products and services. It is a passively managed fund. The selection segments include augmented reality, mirror world, lifelog, and virtual world.
For inclusion in the ETF, the company must have earned more than 50% of its revenue from metaverse and should have a market capitalization of US$300 million. The index is annually rebalanced.
This open-ended fund was launched by Exchange Traded Concepts in October 2021. It tracks Fount Metaverse Index. Its top holdings include Apple Inc., Alphabet Inc., and Meta Platforms with 16%, 6% and 4% holdings.
MTVR has a market capitalization of US$9.11 million. MTVR closed at US$20.24 on April 6, 2022.
Proshares Metaverse ETF (VERS)
Expense ratio – N/A
Asset under management (AUM) - US$7.58 million
Average daily volume - US$864.77 thousand
Total holdings - 41
The VERS ETF provides exposure to companies engaged in data processing technologies for virtual and augmented reality, social media, gaming, etc.
The index is rebalanced and reconstituted semi-annually in June and December.
ProShares issued the ETF as an open-ended fund in March 2022. Its top holdings include Apple Inc., Meta Platforms, and NVIDIA Corp., with at least 6% holding.
It has a market capitalization of US$7.27 million.
VERS closed at US$42.78 on April 6, 2022.
Subversive Metaverse ETF (PUNK)
Expense ratio – 0.75%
Asset under management (AUM) - US$1.28 million
Average daily volume - US$50.90 thousand
Total holdings - 62
PUNK is an actively managed ETF. It invests in US and foreign stocks that provide products and services to support metaverse infrastructure, applications, etc.
The companies are selected based on their exposure to any of the metaverse's seven layers: discovery, creator economy, spatial computing, experience, decentralization, human interface, and infrastructure.
It is an open-ended fund issued by RBS Securities in January 2022. It has the highest exposure of around 4% in NVIDIA Corp., followed by Coinbase Global Inc., Block Inc., and Cloudflare Inc.
It has a market capitalization of US$1.22 million. PUNK closed at US$24.39 on April 6, 2022.
Fidelity MSCI Information Technology Index ETF (FTEC)
Expense ratio – 0.08%
Asset under management (AUM) - US$6.25 billion
Average daily volume - US$46.47 million
Total holdings - 362
FTEC provides exposure to US technology firms across all market caps. It gives exposure to information technology companies. This index is reviewed every quarter starting in February.
It was launched in 2013 before the metaverse concept picked up and only invests in technology companies. It is an open-ended fund issued by Fidelity.
Its top three holdings include Apple Inc., Microsoft Inc., and NVIDIA Corporation, with roughly 22%, 18%, and 5% holdings. Its current market capitalization is US$6.35 billion. The ETF closed at US$118.96 on April 6, 2022.
Today, more companies are entering the metaverse space and exploring the growth potential in digital assets, including digital currency, gaming, NFTs, virtual events, natural language processing, social media, etc. However, investors should carefully evaluate the companies and the broader market before investing in the stock market.