In this article, we discuss 5 best metaverse ETFs to buy. If you want our detailed analysis of the metaverse and these ETFs, go directly to 10 Best Metaverse ETFs To Buy.
5. Roundhill Ball Metaverse ETF (NYSE:META)
Roundhill Ball Metaverse ETF (NYSE:META) is designed to allow investors exposure to the metaverse by mirroring the performance of the Ball Metaverse Index, which consists of a portfolio of global companies that are actively involved in the metaverse. These companies belong to multiple industries including computing, networking, virtual platforms, payments, and hardware.
Roblox Corporation (NYSE:RBLX) is a major component of Roundhill Ball Metaverse ETF (NYSE:META)’s portfolio. Roblox Corporation (NYSE:RBLX) has already developed virtual worlds where millions of people socialize, play video games, and participate in the digital economy. The company is one of the best bets in the metaverse.
Roblox Corporation (NYSE:RBLX) is a popular stock among elite hedge funds. In Q3 2021, 50 funds were bullish on Roblox Corporation (NYSE:RBLX), with collective stakes amounting to $3.5 billion. Tiger Global Management was the biggest stakeholder of the company in the third quarter, with 17.4 million shares worth $1.3 billion.
Here is what Jefferies Group has to say about Roblox Corporation (NYSE:RBLX) in its Q3 2021 investor letter:
“If we look at the Metaverse concept with more lenient guidelines for interoperability, then it becomes easier to see why certain companies are being referred to as Metaverse. On the virtual side, we’d point to companies like Epic Games, TakeTwo and Roblox. In augmented reality, it would be Niantic and SNAP. These are the large capitalized players in the space but albeit, not the only ones. We expect new multi-billion dollar companies will rise as the Metaverse becomes more mature.
Roblox is a good example. The content is almost entirely user generated, the engine that powers the developer studio is provided by Roblox and developers/creators share in almost all the money that users spend on the platform. In addition, many of the items that you purchase in the avatar marketplace, or even a branded experience like Vans World, can be taken across experiences. Roblox talks a lot about platform extension, which would move the platform beyond just gaming/leisure experiences and into education and workplace offerings. The developer community has the capability to build tools for other developers, there are professional studios being built on the platform and many consumer-facing brands/content are partnering with Roblox to ensure a virtual presence. Roblox actually has a lot of the pieces for our utopian definition of Metaverse, but things like technology, interoperability with outside platforms and a dynamic, two-way economy are what’s missing. However, given our thesis that full interoperability is somewhat unrealistic, it’s easy to see how Roblox fits the definition…(click here to read the full text)
4. Evolve Metaverse ETF (TSX:MESH.TO)
Evolve Metaverse ETF (TSX:MESH.TO) is the first Canadian metaverse exchange traded fund that exposes investors to an actively managed diversified portfolio of firms that are responsible for the development of the metaverse. Evolve Metaverse ETF (TSX:MESH.TO) holds 25 securities and has assets under management of $13.362 million.
Over 90% of the companies held by Evolve Metaverse ETF (TSX:MESH.TO) belong to the information technology and communications sectors. The ETF exposes its clients to global market leaders from the United States, China, Taiwan, Japan, and Singapore.
A large holding of Evolve Metaverse ETF (TSX:MESH.TO) is Tencent Holdings Limited (OTC:TCEHY), a Chinese company that is well positioned to benefit from the metaverse. Tencent is the leading game publisher in China, as well as a prominent investor in significant gaming studios worldwide. Tencent Holdings Limited (OTC:TCEHY) is in the process of buying Black Shark, a gaming handset maker, which will invest in AR/VR headsets after the acquisition, furthering the parent company’s foray into the metaverse.
3. HORIZONS GLOBAL METAVERSE INDEX (TSX:MTAV.TO)
HORIZONS GLOBAL METAVERSE INDEX (TSX:MTAV.TO) is an exchange traded fund that seeks to replicate the performance of the Solactive Global Metaverse Index, which consists of companies that are expected to grow and support the development of the metaverse. HORIZONS GLOBAL METAVERSE INDEX (TSX:MTAV.TO) is a relatively new ETF that was listed on the Toronto Stock Exchange on November 26, 2021.
Companies in the portfolio of HORIZONS GLOBAL METAVERSE INDEX (TSX:MTAV.TO) belong to multiple industries including digital marketplaces, digital infrastructure, digital payments, creator economies, AR/VR, and gaming. One of the top holdings of HORIZONS GLOBAL METAVERSE INDEX (TSX:MTAV.TO) is Visa Inc. (NYSE:V), a fintech and payments company that headed into the metaverse with its first purchase of non-fungible tokens worth $150,000 back in August 2021.
Visa Inc. (NYSE:V) is a top stock pick of smart investors as of Q3 2021, with 143 elite funds holding combined stakes worth over $26 billion in the company. TCI Fund Management held the biggest position in Visa Inc. (NYSE:V) at the end of September 2021, with roughly 20 million shares amounting to $4.4 billion.
Here is what Weitz Investment Management, Inc. has to say about Visa Inc. (NYSE:V) in its Q4 2021 investor letter:
“Reports to investors usually focus on the winners that prove the worthiness of the managers. It’s possible that we’ve been guilty of that on occasion, despite our best efforts to accurately convey what has worked and what hasn’t. This time, though, we are going to celebrate the great businesses we own that “went nowhere” in 2021. In a generally expensive market facing potentially strong headwinds in 2022, we find it very encouraging to own a number of proven winners whose stocks have been “resting” for the last year or so. They will not necessarily save us from markdowns during broad-based corrections, but they are companies that we believe can survive and grow business value through almost anything. They are the kinds of businesses that allow us to sleep well at night and not be tempted to sell at the wrong time. Here are some examples:
Established payments companies have been out of favor recently. Cross-border payments have been depressed with COVID disrupting international travel. These types of payments are particularly lucrative for Visa and their absence has impacted earnings. Further, we believe investors have overestimated the negative competitive impact of new fintech companies that have emerged over the past few years. Many of these “disrupters” depend on the Visa “rails” over which electronic payments travel, and these wily incumbents have a way of acquiring, copying or otherwise competing with upstarts.”
2. Fount Metaverse ETF (NYSE:MTVR)
Fount Metaverse ETF (NYSE:MTVR) is an exchange traded fund that tracks an index of almost 50 companies that follow the metaverse theme. The fund was established on October 27, 2021, and has almost $13 million in assets under management as of February 16, 2022.
One of the leading stocks in Fount Metaverse ETF (NYSE:MTVR)’s portfolio is Meta Platforms, Inc. (NASDAQ:FB), a company that pioneered the vision for the metaverse. Meta Platforms, Inc. (NASDAQ:FB) is a leading tech stock among the smart investors, with 248 hedge funds holding stakes worth $38.5 billion in the company as of Q3 2021. Eagle Capital Management owned a prominent stake in Meta Platforms, Inc. (NASDAQ:FB), with more than 7 million shares valued at $2.4 billion.
Here is what Weitz Investment Management has to say about Meta Platforms, Inc. (NASDAQ:FB) in its Q4 2021 investor letter:
“A couple of other platform companies deserve a mention as well. Meta Platforms and Alphabet have both been under regulatory scrutiny that has affected their valuations. The threats of punitive action are real, but we have tried to be imaginative about how onerous any fines, rule changes or forced divestitures might be, and we believe that the five year outlook for each is well above average under almost any scenario. So, we include these two in the list of the under-appreciated.”
1. Amplify Transformational Data Sharing ETF (NYSE:BLOK)
Established in 2018, Amplify Transformational Data Sharing ETF (NYSE:BLOK) is an actively managed exchange traded fund that invests in firms that develop and utilize blockchain technologies. The ETF has 45 holdings in its portfolio.
Amplify Transformational Data Sharing ETF (NYSE:BLOK)’s largest investment is in Coinbase Global, Inc. (NASDAQ:COIN), an American company that operates a cryptocurrency exchange platform and is positioned to play a focal role in the digital economy of the metaverse.
Elite hedge funds hold significant stakes in Coinbase Global, Inc. (NASDAQ:COIN). In the third quarter of 2021, 50 hedge funds were bullish on Coinbase Global, Inc. (NASDAQ:COIN), with collective stakes amounting to roughly $3 billion. ARK Investment Management held the largest stake in the company in Q3 2021, with approximately 7 million shares worth $1.59 billion.
Here is what Hayden Capital has to say about Coinbase Global, Inc. (NASDAQ:COIN) in its Q3 2021 investor letter:
“Coinbase (COIN): We established a new position in Coinbase, the dominant US crypto exchange and brokerage, this quarter. Given the misperceptions and early-stage nature of the industry, I thought it would be helpful for our partners’ understanding to share a report outlining our thesis, which we published on October 31st.
At a high level, we believe the crypto economy is in the middle of “crossing the chasm” into mainstream adoption & use cases, which will result in millions of mainstream users needing to transact in crypto in some form.
Coinbase is well positioned in the Western, regulated markets to capture this influx – considering their dominant market share / mindshare, their focus on the casual user and thus superior user experience compared to alternatives, and their position as a “toll-booth” for this industry. Longer-term, we also believe Coinbase has “super-app” ambitions, and will be the primary gateway for both the general population and institutions to interact with the crypto economy…” (Click here to see the full text)
You can also take a look at 10 Best Semiconductor Stocks to Buy for 2022 and 10 Best Solar Energy Stocks to Buy for 2022.
