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The concept of Metaverse is emerging right now. The Metaverse is a shared virtual 3D world, or worlds, that are interactive and collaborative. It is facilitated by the use of virtual and augmented reality. The concept became extremely popular in 2021 particularly since Facebook rebranded itself as Meta Platforms (FB).
With more and more companies from various industries joining the Meta bandwagon, it is clear that Metaverse will dictate the next generation of Internet sooner or later. It offers a significant investment opportunity for the coming years.
“Technological innovation deployed in the construction of the ongoing initiatives to build a metaverse is laying the foundation for a new digital frontier. In this regard, bold new ventures are leaning into the future to create a more dynamic and exciting era of opportunity in the digital space. These areas, in particular, are ripe for investor exposure, especially due to their potential application in a variety of industries,” per First Trust Advisors.
Per the factsheet of PUNK, VR and AR are now rapidly increasing in popularity, with big tech companies focusing on the Metaverse not just in gaming and computing but also in security and payment processing. We all know that cyber security is a need of the hour and payment processing is the future of transactions as the mode gained immense precedence during COVID-19-induced lockdowns.
Bloomberg Intelligence expects the market opportunity for the Metaverse to reach $800 billion by 2024 from $500 billion in 2020, based on its analysis and Newzoo, IDC, PWC, Statista and Two Circles data. The primary market for online game makers and gaming hardware may top $400 billion in 2024 while the remaining business will come from live entertainment and social media. Gaming, AR, VR create $413 billion primary market of Metaverse, per Bloomberg.
The global metaverse market size is predicted to attain $936.6 billion by 2030, according to a new report by Grand View Research Inc, as quoted on Bloomberg. The market is expected to log a CAGR of 41.6% from 2023 to 2030, due to increasing demand from end-use industries like media and entertainment, education, and aerospace and defense.
On the other hand, Statista revealed that the future market development of the metaverse is expected to log considerable growth, with a CAGR of 34.98% and reaching a total market size of $485.8 billion by 2030. Metaverse’ reach is expected to be 700 million people globally by the end of the decade, per the source.
Most recently, Deloitte has partnered with Web3 platform Vatom to offer mesmerizing experiences for various industries, including virtual reality for cultural augmentation and community engagement for brands. Statista insights said that 15% of the digital economy has already shifted to the metaverse, as quoted on weforum.org. Against this backdrop, below we highlight a few ETFs gearing up to capitalize on the metaverse boom.
ProShares’ VERS ETF tracks the Solactive Metaverse Theme Index, which relies on state-of-the-art algorithms designed to capture the metaverse investment opportunity as it evolves.
The index tracks 40 companies spanning a broad range of industries – from device makers to data processers, as well as social media, gaming, and other platforms that facilitate digital interaction. These companies are placing significant stakes in this virtual ground with the hope that its development represents the next phase of the Internet. The fund charges 58 bps in fees.
Media & Entertainment takes about 25.29% of the fund weight, followed by Software & Services with about 23.60% of VERS. Semiconductors (23.39%) and Technology Hardware & Equipment (13.86%) round out the top four spots. Nvidia (4.99%), Meta Platforms (4.92%) and Microsoft (4.86%) hold top three positions in the fund.
The underlying Ball Metaverse Index seeks to track the performance of globally listed equity securities of companies that engage in activities or provide products, services, technologies, or technological capabilities to enable the Metaverse, and benefit from its generated revenues. The 50-stock METV charges 59 bps in fees.
Gaming Platform (21.7%), Computing Components (21.1%) and Cloud Solutions (19.1%) take the top three spots of the fund. NVIDIA (8.7%), Apple (7.95) and Roblox (7.67%) are the top three stocks of the fund.
Fount Metaverse ETF
The underlying Fount Metaverse Index measures the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology. Apple (11.9%), Meta Platforms (4.5%) and Alphabet (3.96%) are the top three stocks of the fund.
The fund looks to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity Metaverse Index, which is designed to reflect the performance of a global universe of companies that develop, manufacture, distribute, or sell products or services related to establishing and enabling the Metaverse.
Meta Platforms (6.19%), Nvidia (5.78%) and Tencent Holdings (4.93%) hold the top three stocks in the fund. United States (50.19%) takes the top-most position, as far as the geographical segmentation is concerned.
The underlying Indxx Metaverse Index is rules-based and invests in the next generation of the Internet, which has the potential to allow creators to build the next chapter of human interaction through immersive experiences in three-dimensional virtual spaces.
The 41-stock fund puts 32.22% weight in Entertainment, about 27.91% weight in Semiconductors & Semiconductor Equipment and 13.91% weight in Software. Nvidia (4.41%), Meta (4.1%) and Advanced Micro Devices (3.7%) hold the top three stocks in the fund. The fund charges 70 bps in fees.
Global X Metaverse ETF
The underlying Global X Metaverse Index provides exposure to companies that are positioned to benefit from the development and commercialization of the metaverse. Meta Platforms (9.16%), Nvidia (8.565) and Netease (6.61%) are the two three stocks of the fund. Communication Services (68.3%) and Information Technology (24.0%) are top two sectors of the fund. As far as geographical segmentation is concerned, the United States (50.4%) takes the top position.
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A Guide to Metaverse ETF Investing
The concept of Metaverse is emerging right now. The Metaverse is a shared virtual 3D world, or worlds, that are interactive and collaborative. It is facilitated by the use of virtual and augmented reality. The concept became extremely popular in 2021 particularly since Facebook rebranded itself as Meta Platforms (FB).
With more and more companies from various industries joining the Meta bandwagon, it is clear that Metaverse will dictate the next generation of Internet sooner or later. It offers a significant investment opportunity for the coming years.
“Technological innovation deployed in the construction of the ongoing initiatives to build a metaverse is laying the foundation for a new digital frontier. In this regard, bold new ventures are leaning into the future to create a more dynamic and exciting era of opportunity in the digital space. These areas, in particular, are ripe for investor exposure, especially due to their potential application in a variety of industries,” per First Trust Advisors.
Per the factsheet of PUNK, VR and AR are now rapidly increasing in popularity, with big tech companies focusing on the Metaverse not just in gaming and computing but also in security and payment processing. We all know that cyber security is a need of the hour and payment processing is the future of transactions as the mode gained immense precedence during COVID-19-induced lockdowns.
Bloomberg Intelligence expects the market opportunity for the Metaverse to reach $800 billion by 2024 from $500 billion in 2020, based on its analysis and Newzoo, IDC, PWC, Statista and Two Circles data. The primary market for online game makers and gaming hardware may top $400 billion in 2024 while the remaining business will come from live entertainment and social media. Gaming, AR, VR create $413 billion primary market of Metaverse, per Bloomberg.
The global metaverse market size is predicted to attain $936.6 billion by 2030, according to a new report by Grand View Research Inc, as quoted on Bloomberg. The market is expected to log a CAGR of 41.6% from 2023 to 2030, due to increasing demand from end-use industries like media and entertainment, education, and aerospace and defense.
On the other hand, Statista revealed that the future market development of the metaverse is expected to log considerable growth, with a CAGR of 34.98% and reaching a total market size of $485.8 billion by 2030. Metaverse’ reach is expected to be 700 million people globally by the end of the decade, per the source.
Most recently, Deloitte has partnered with Web3 platform Vatom to offer mesmerizing experiences for various industries, including virtual reality for cultural augmentation and community engagement for brands. Statista insights said that 15% of the digital economy has already shifted to the metaverse, as quoted on weforum.org. Against this backdrop, below we highlight a few ETFs gearing up to capitalize on the metaverse boom.
ETFs in Focus
ProShares Metaverse ETF (VERS - Free Report)
ProShares’ VERS ETF tracks the Solactive Metaverse Theme Index, which relies on state-of-the-art algorithms designed to capture the metaverse investment opportunity as it evolves.
The index tracks 40 companies spanning a broad range of industries – from device makers to data processers, as well as social media, gaming, and other platforms that facilitate digital interaction. These companies are placing significant stakes in this virtual ground with the hope that its development represents the next phase of the Internet. The fund charges 58 bps in fees.
Media & Entertainment takes about 25.29% of the fund weight, followed by Software & Services with about 23.60% of VERS. Semiconductors (23.39%) and Technology Hardware & Equipment (13.86%) round out the top four spots. Nvidia (4.99%), Meta Platforms (4.92%) and Microsoft (4.86%) hold top three positions in the fund.
Roundhill Ball Metaverse ETF (METV - Free Report)
The underlying Ball Metaverse Index seeks to track the performance of globally listed equity securities of companies that engage in activities or provide products, services, technologies, or technological capabilities to enable the Metaverse, and benefit from its generated revenues. The 50-stock METV charges 59 bps in fees.
Gaming Platform (21.7%), Computing Components (21.1%) and Cloud Solutions (19.1%) take the top three spots of the fund. NVIDIA (8.7%), Apple (7.95) and Roblox (7.67%) are the top three stocks of the fund.
Fount Metaverse ETF
The underlying Fount Metaverse Index measures the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology. Apple (11.9%), Meta Platforms (4.5%) and Alphabet (3.96%) are the top three stocks of the fund.
Fidelity Metaverse ETF (FMET - Free Report)
The fund looks to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity Metaverse Index, which is designed to reflect the performance of a global universe of companies that develop, manufacture, distribute, or sell products or services related to establishing and enabling the Metaverse.
Meta Platforms (6.19%), Nvidia (5.78%) and Tencent Holdings (4.93%) hold the top three stocks in the fund. United States (50.19%) takes the top-most position, as far as the geographical segmentation is concerned.
First Trust Indxx Metaverse ETF (ARVR - Free Report)
The underlying Indxx Metaverse Index is rules-based and invests in the next generation of the Internet, which has the potential to allow creators to build the next chapter of human interaction through immersive experiences in three-dimensional virtual spaces.
The 41-stock fund puts 32.22% weight in Entertainment, about 27.91% weight in Semiconductors & Semiconductor Equipment and 13.91% weight in Software. Nvidia (4.41%), Meta (4.1%) and Advanced Micro Devices (3.7%) hold the top three stocks in the fund. The fund charges 70 bps in fees.
Global X Metaverse ETF
The underlying Global X Metaverse Index provides exposure to companies that are positioned to benefit from the development and commercialization of the metaverse. Meta Platforms (9.16%), Nvidia (8.565) and Netease (6.61%) are the two three stocks of the fund. Communication Services (68.3%) and Information Technology (24.0%) are top two sectors of the fund. As far as geographical segmentation is concerned, the United States (50.4%) takes the top position.