Page 44 - Investment Advisor July/August 2022

ETF ADVISOR

By Roger Wohlner

Investing in the Metaverse: What You

Need to Know

While the sector is in its infancy, opportunities include many products,

including ETFs.

he term metaverse seems to be Fidelity Metaverse ETF (ticker
all over the news these days. FMET), launched April 21, is down 8%
TThere is some debate as to as of May 24. The fund has $4.7 million
exactly what the metaverse is. There are in net assets and an expense ratio of
a number of investing opportunities in 0.39%. Of its 59 holdings, the biggest are
the metaverse, with more likely to sur- Meta Platforms, Apple and Tencent.
face in the future. The term “top” metaverse ETFs may
be a bit premature at this juncture, as
WHAT IS THE METAVERSE? this is a developing ETF sector. There
In many ways, the term metaverse is are a number of broader technology
still evolving and is hard to define. In and related ETFs that hold a number of
some ways, it is the next iteration of Roundhill Ball Metaverse ETF metaverse stocks, but these are not pure
the internet. The metaverse is about (ticker METV), which was launched in plays on the metaverse.
giving users an immersive experience June 2021. The fund has just over $600
beyond the capabilities of today’s inter- million in assets and an expense ratio of CAN YOU MAKE MONEY IN
net. Beyond a PC or a smartphone, users 0.59%. The fund has 43 holdings. Meta THE METAVERSE?
of the metaverse would use tools such as and NVIDIA recently combined to make There are a number of ways that you
virtual reality headsets and controllers up about 17% of the fund as the two larg- can potentially make money in the meta-
to enhance the experience. est holdings. YTD total return through verse. A few to consider:
The metaverse economy has been lik- April 30 was -36.76%. • Investing in metaverse tokens such
ened to an online, virtual version of Amplify Transformational Data as SAND or MANA.
the physical economy we are used to. Shrg ETF (ticker BLOK), which was • Using play-to-earn gaming plat-
The metaverse economy does (or will) launched in 2018. The ETF has 42 hold- forms in the metaverse. Be aware
include a variety of activities, such as ings, with about 41% of the fund’s assets that many of these games require a
shopping, attending concerns and other concentrated in its top 10 holdings. This significant upfront investment.
entertainment events, buying/selling ETF is actively managed and focuses on • Investing in metaverse real estate.
virtual real estate and more. companies that develop and use various As with real estate in the real world,
Almost any economic or business blockchain-related technologies. The investors need to consider key fac-
activity you can imagine in the real fund’s YTD return through April 30 tors such as location before investing.
world is possible in the virtual world was -33.41%, but its trailing three-year • Metaverse tourism. You can buy
of the metaverse. However, the meta- average annual return was 21.08%. The virtual land plots geared to virtual
verse is in its infancy, so we don’t know fund’s expense ratio is 0.71%. tourists. Some feel that virtual tour
what companies and applications will Fount Metaverse ETF (ticker guides and travel agents may be
be successful. MTVR), which currently holds 49 required in the future.
stocks. The fund tracks an index of com- • Buying, selling and creating NFTs.
TOP METAVERSE ETFs panies that follow a metaverse theme. For a full discussion of the metaverse,
There are a few ETFs that track meta- The fund was established in October go to thinkadvisor.com
verse stocks all or in part. These ETFs 2021. According to Morningstar, the
are generally new and don’t have much ETF is small, with $7.9 million in assets. Roger Wohlner is a financial writer with
of a track record. Some metaverse ETFs The expense ratio is 0.70%. As of April over 20 years of industry experience as a Adobe Stock
to monitor and consider: 30, the fund’s YTD loss was 24.56%. financial advisor.

42 INVESTMENT ADVISOR JULY/AUGUST 2022 | ThinkAdvisor.com