ProShares launched the ProShares Metaverse ETF (VERS), which is designed to give investors access to leading companies tied to the growth of the metaverse. Scott Helfstein, executive director, thematic investing at ProShares, spoke with ETF Trends about why they brought this ETF to the market and why it was important to go beyond the big, household names.
ETF Trends: Tell us about VERS and what it invests in.
Scott Helfstein: With VERS, we focus on the changing nature of interacting with the digital world, particularly the immersive and interactive experiences within the digital world. We’re focused on two areas in particular: virtual reality and augmented reality. The goal is to try and capture the companies that are opening a new branch of the economy and changing that way with not just how we entertain ourselves but work, interact, and engage in commerce.
We think the opportunity is much bigger than just eGaming. If you look at some reports from some of the large banks, the metaverse could be a trillion-dollar annual segment of the economy. We think it’s an excellent opportunity for investors to access some of these companies now.
ETF Trends: What are some of the companies VERS invests in?
Scott Helfstein: We do include the MAANGs [Meta, Amazon, Apple, Netflix, and Google], but that’s only about 35% of the index. More than 60% is focused on the mid- and small-cap players creating the new technologies. This includes hardware and devices users need as well as revolutionary software platforms and includes areas from data processing to interchange or processing standards.
One company is Unity Software, which is a development engine. Unity is already big in the gaming space, but they’ve been talking more about using their technology to create 3D experiences and digital twinning, a system of virtual representation that duplicated a tool so that people can train on it.
Another company is Matterport, which has an integrated camera and software system that allows users to create 3D virtual experiences of physical spaces. Its mainstream use is in real estate to enable people to do virtual walkthroughs of properties.
ETF Trends: Why did you decide that now was the right time to bring a fund like this to market?
Scott Helfstein: Right now, the only metaverse funds that exist are from startup players. There really is no offering from an established or scaled ETF issuer like ProShares. So, we think the market is open, and while people could wait to invest in the metaverse until big brands dominate it, we think it’s important to allow investors to get in right when the infrastructure’s being built. We’re in the earliest stages of development, offering investors a trusted name to get access to the companies at the forefront of building and developing these virtual world capabilities.
ETF Trends: What are your long-term goals for the fund?
Scott Helfstein: It’s important to have a basket of companies rather than just focusing on one or two household names. We used a combination of natural language processing and revenue-based tests to identify some of the players perhaps people don’t own to give a differentiated viewpoint of this emerging market. So, the goal is to provide access to what should be a large new facet of the economy as well as using a range of methods to deliver the technology, infrastructure, and ecosystem that’s unique to the metaverse.
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