The metaverse continues to be an area of intrigue among investors who can foresee the potential growth in its ongoing development. It can now be encapsulated in an exchange traded fund (ETF).
“That global metaverse market could grow at a compound annual growth rate (CAGR) of 39.1% between 2022 and 2030, according to Report Ocean,” a Motley Fool article says. “However, there’s a lot of hype and noise in this booming market, and it can be tough for investors to separate the losers from the potential winners.”
As such, one way is to get broad-based exposure to the Global X Metaverse ETF (VR). The fund seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Global X Metaverse Index.
The fund’s top holding is Nintendo with about a 9% allocation. The company is looking to bolster the gaming experience with the inclusion of metaverse technology to create a unique user experience.
High Growth Potential in a Nascent Space
While the digital assets space is continuing to grow in terms of familiarity amongst the capital markets, it’s still a nascent space with explosive growth potential in the near and long term. The metaverse, in particular, is just starting to gain more traction despite the current bear market in cryptocurrencies.
It’s not stopping the intrigue surrounding the digital assets space, including the metaverse. Per its fund description, VR seeks to invest in companies that are positioned to benefit from the development and commercialization of the metaverse.
Companies included in the fund are those involved in the development of hardware and software that allows users to experience extended digital realities; creator platforms, where live streaming and other media content is shared in 3D simulations; creator economies, involving the development of applications involving digital payments, such as the creation and distribution of non-fungible tokens (NFTs) and other digital asset payment gateways. Companies also include those involved in the digital infrastructure/hardware, such as semiconductors, cloud computing technology, and 5G infrastructure supporting digital media consumption.
Highlights of VR:
- High growth potential: The global metaverse market is expected to increase more than 50% from 2021 to 2022, exceeding $100 billion. Forecasts suggest it could surpass $1.5 trillion by 2029, highlighting the substantial room for growth.
- Expanding horizons: While early conceptions of the metaverse were centered on gaming and other forms of entertainment, there are emerging use cases for shopping and even hybrid work, suggesting we may be just scratching the surface of potential applications.
- Unconstrained approach: The metaverse is supported by an intricate network of hardware and software providers, creators, and collaborators. VR invests accordingly, targeting companies regardless of sector or geographic categorization.
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