Metaverse ETFs (Exchange Traded Funds) give you the opportunity to enter the first floor of potentially lucrative technology trends.Early attempts to build a metaverse were controversial, with Mark Zuckerberg pushing his Facebook meta (meta -0.79%) negatively affects reputation. But we are still in the early stages.

This means that investors who enter now have the potential to reap huge returns as the metaverse becomes more mainstream. Several research groups predict significant growth for the Metaverse, with Contrive Datum Insights predicting that by 2030 the Metaverse will be worth over $1.3 trillion. If you want to invest in the metaverse without picking companies, ETFs may be the answer. This guide discusses the Metaverse and the top Metaverse ETFs to buy.

Understanding the metaverse

Understanding the metaverse

The metaverse is a broad concept, but at its core it refers to a network of immersive virtual worlds. People can enter these worlds and interact with them and other users through their avatars. You can access the Metaverse using a virtual reality (VR) headset.

There are all sorts of possible uses for the metaverse. Video games are a natural fit. Virtual world games where you interact with other players are already popular. Metaverse games bring players closer to the action instead of interacting with these games through a two-dimensional screen.

It may also be the next evolution of online interaction. People have always used the Internet to communicate with others. It started with early chat programs and has progressed to video calling. With the Metaverse, people don’t just see their friends and family on screen, they get the experience of being in the same room.

The metaverse is definitely an exciting idea. Especially for sci-fi fans who have read about similar concepts for decades. It brings many interesting new ideas to reality, such as virtual events and digital real estate. And many of the world’s biggest companies are investing huge amounts of money.That includes tech giants apple (AAPL 0.79%) announced the Vision Pro mixed reality headset in June 2023.

Top 3 Metaverse ETFs to Buy in 2023

Now let’s take a look at the best Metaverse ETFs that invest in tech stocks and other companies associated with the Metaverse.

1. Round Hill Ball Metaverse ETF

1. Round Hill Ball Metaverse ETF

Roundhill Ball Metaverse ETF (NYSE:METV) is designed to track the Ball Metaverse Index. The index includes globally listed companies actively involved in the Metaverse, including companies that design virtual worlds and assets, provide computing power, and financial services companies that support digital currency payments. It consists of

This ETF has a concentration of large-cap stocks. A total of 49 stocks are held, and the expense ratio is 0.59%. Major holdings include:

• apple
• roblox (RBLX -1.26%)
• meta
• Nvidia (NVDA -2.77%)
• microsoft (MSFTMore 0.18%)

The fact that this Metaverse ETF has a large number of large companies is both good and bad. They should be less volatile than ETFs and should allocate more money to small businesses. After all, some of the company’s top holdings are market leaders.

However, this could also be less upside for ETF investors if the Metaverse takes off. Companies such as Apple and Microsoft have invested in the Metaverse, which is already a large business offering a wide variety of products and services. The success of the metaverse does not affect as much as small businesses that are metaverse-focused.

2. Global X Metaverse ETF

2. Global X Metaverse ETF

The metaverse can affect a wide range of industries. If you want a metaverse investment covering many of these industries, Global X Metaverse ETF (NASDAQ:VR) is worth a look.

It aims to track the Global X Metaverse Index and is intended for companies that could benefit from the development and commercialization of the Metaverse, regardless of sector or geographic classification. Examples include hardware and software companies that enable users to experience digital reality, creator platforms, and the creator economy, focused on developing and distributing digital currencies and non-fungible tokens (NFTs). Masu.

The ETF holds 40 stocks and has an expense ratio of 0.5%. Major holding assets are as follows.

• Nvidia
• meta
• NetEase (NTES 1.45%)
• coinbase global (coin -0.51%)
• Take-Two interactive software (Two 0.66%)

3. Faunt Metaverse ETF

3. Faunt Metaverse ETF

For funds in which technology companies from around the world participate, Metaverse Fountain ETFs (NYSE:MTVR). It is designed to follow the performance of the Fount Metaverse Index and uses the following process to select stocks.

• likely to be involved in the four components of the metaverse: a three-dimensional interactive world, a platform for users to create and share content, services that allow users to interact with each other, and systems that track and manage interactions Identify your company. .
• Predict 1-year future revenue from any metaverse-related service or product using a proprietary artificial intelligence (AI) algorithm.
• Only companies expected to derive 50% or more of their revenue from metaverse-related services or products are included.

This Metaverse ETF has a slightly higher expense ratio of 0.7% than other ETFs on this list. 50 securities are selected for inclusion and weighted by market capitalization. The top holdings are:

• apple
• meta
• alphabet (Google 0.55%)(goog 0.59%)
• draft kings (DKNG -0.18%)
• Adobe (Adobe -0.19%)

pros and cons

Pros and Cons of Investing in the Metaverse

While there are some great reasons to invest in the metaverse, there are also some potential downsides. Before buying a Metaverse ETF, it’s important to know the pros and cons. The biggest advantages of Metaverse investments are:

• Metaverse technology is still in its early stages of development, so the most successful Metaverse companies of the future may be underestimated today.
• Many of the largest companies in the metaverse are tech stocks, which tend to have high growth potential.
• Studies predict that the Metaverse will grow significantly and could be worth over $1 trillion by the end of the decade.

The cons of investing in the metaverse are:

• The metaverse is unproven and there are no guarantees of success.
• There are all sorts of companies and crypto projects that claim to be working on metaverse applications. This makes it difficult to decide which companies to invest in.
• Metaverse ETF fees are high.

Related investment topics

Should I invest?

Should You Invest in the Metaverse?

If you have a diversified portfolio, chances are you’ve already invested in the metaverse, at least to some extent. Many large technology companies are working on Metaverse products and services, so if their stock includes those products and services, they are exposed to the Metaverse to some extent.

Depending on how much you believe in the metaverse, you may want to focus on it in your portfolio. This can be done by using one of the Metaverse ETFs, or by investing more in companies that have strong ties to the Metaverse.

Keep in mind that exciting new technology doesn’t always work. And even when it does, it often takes longer and creates more volatility for early investors. (For a perfect example, look at the cryptocurrency market.)

Whatever your choice, be sure to maintain a balanced portfolio that invests across major market sectors. Metaverse stocks may offer more upside to portfolios, but balance is also important to mitigate risk.