Exchange-traded fund managers seem to have a different point of view than tabloids, which continue to run stories that downplay the potential of the metaverse.
Nearly a year after the first 3D virtual space-focused exchange-traded fund (ETF) came out in 2021, the metaverse has created an amazing 35 ETFs.
In a recent report by Morningstar, this number puts it ahead of internet-themed ETF at 32, blockchain at 29, and cloud computing at 23 as the hottest ETF sub-theme.
Even though there was a crypto winter, the rise of ETFs about the metaverse has continued well into 2022.
Even though some market experts say otherwise, the metaverse is a virtual environment made up of immersive 3D worlds where people can play games, make friends, go to virtual events like concerts, and trade virtual goods.
Some exchange-traded fund managers have made funds that focus on the hardware sector of the industry. These funds follow an index fund of companies that invest in computer hardware, VR/AR devices, and other hardware.
There are also those that focus on software, like companies that invest in data protocols and blockchain infrastructure.
But some fund managers, like Global X, have decided to make an ETF called “metaverse” that tracks a group of companies that invest in both hardware and software. In April, Global X said that its new exchange-traded fund (ETF) is designed to give investors access to businesses that are well-positioned to make money from the growth and commercialization of the metaverse.
First Trust’s thematic metaverse ETF tracks the Indxx Metavere Index, which looks at companies that are building the foundation for the immersive 3D world.
Others have chosen “content,” which seems to be the word most people use to talk about the metaverse. Businesses that are interested in virtual worlds, metaverse games, and virtual real estate are part of this group. For example, CI Global Asset Management’s metaverse ETF tracks the Alerian Galaxy Immersive Digital Worlds Hedged to CAD Dollars Index.
Fund managers who invest in metaverse ETFs say that the fall in prices is due to the collapse of the tech industry as a whole, even though the value of some of the companies that invest in the metaverse has dropped, which is what has happened to the prices of the ETFs.
Leading companies that do market research and invest money say that by 2030, the metaverse will be worth trillions of dollars. Goldman Sachs and Morgan Stanley both said in reports that the market could be worth up to $8 trillion, while McKinsey said the market would be worth $5 trillion in eight years.
As of right now, the most optimistic report is Citigroup’s metaverse outlook report, which says that the metaverse could be worth $13 trillion.
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