Metaverse ETFs, the best news of 2022

“We see the metaverse as the next leap forward in global communication and connectivity. It has the potential to transform many sectors and processes and reshape all aspects of society, the way we work, consume, interact and produce.” In early December, Omar Moufti, product strategist for thematic and sector ETFs at BlackRock, announced the arrival of this investment heavyweight to the metaverse ETF market. It is sixth in Europe.

“Metaverse is an immersive virtual world built on gaming, virtual reality (VR) and augmented reality (AR) elements. At this point, it’s a lot like the internet in the early 1990s or the smartphone in the early 2000s: we expect it to be big and change people’s daily lives. But we don’t yet know exactly how or to what extent the change will happen,” Reid Menge of the BlackRock Technology Equity Team admitted in February.

The chart shows how quickly mentions of certain technology topics in global company transcripts reach an “interest peak.” A value of 100 corresponds to the term’s peak popularity. (Source: JP Morgan 2021)

The analyst already predicted the arrival of a new generation of augmented reality glasses that could democratize these virtual universes in early 2023. Often announced projects at Apple, Google or Microsoft, only the former is still planned for 2023. “Project Iris” seems more likely to be set in 2024 and Microsoft, which won a multi-billion dollar deal with the US military, faces off military criticism.

Why start talking about augmented reality glasses (or helmets)? For two good reasons. First, in another Black Rock report from May, analysts are clear: “The screen is the limit.” The screen is an existing limitation for the adoption of certain technologies. Also the price to equip yourself and have fun in one of the 200 available metaverses.

A “first division” of eight companies

But also because Meta, Apple, Google and Microsoft are the preferred values ​​of the investment companies that started the metaverse.

In addition to Black Rock’s Euronext-listed iShares Metaverse (MTAV), we also looked at companies in the ETF basket Fidelity (Fidelity Metaverse ACC-USD), Franklin (Franklin Metaverse), HAN ETC (HAN ETF ETC Group Global Metaverse). ) and Roundhill (Roundhill Ball Metaverse).

From this neither complete nor objective criterion, it appears that all five investment firms bet on eight companies, the quintet of Google, Apple, Meta… and Electronic Arts (video games), Nvidia (processors and graphics cards). , Take Two (video games), Unity Software (software), and Snap (social network).

Snap? The same Snap whose CEO Evan Spiegel didn’t hesitate to meet with the CEO of Meta In an interview with the Wall Street Journal, explaining, “The Metaverse ‘lives inside the computer.’ When I get home from a long day at work, the last thing I want to do is live inside my computer!” The same.

The same one who decided to start work in 2021 in “augmented reality” glasses instead of products for virtual reality, the difference is that while VR leads to a digital universe, AR adds something to the existing universe. At this point, Snap joins Apple CEO Tim Cook in advising his teams not to use the word “metaverse,” which “nobody understands.”

Roblox, the intelligent metaverse

Behind this first division of tech players are 9 other companies selected by at least four investment firms: Activision, Adobe, Advanced Micro, Amazon, Coinbase, Microsoft, Nintendo, PTC and Roblox.

Among these fairly well-known actors, let’s highlight the presence of Roblox, one of the first actors to cut its teeth in the metaverse. For its 50 million monthly players, the platform has deliberately set aside AR-VR challenges to focus on a successful user experience. Games, purchases, events, collaborations (with Spotify, Gucci, Nike, BBC, Netflix or Lego), Roblox takes a century forward.

Another player made a different bet: PTC wants to develop the metaverse of the industry by combining the advantages of 3D with the Internet of Things. “Metaverse brings the physical and digital worlds closer together, enabling people and things to more intuitively collaborate with complex systems in person or remotely,” said Steve Dertien, Chief Technology Officer of PTC. “Metaverse, as a 3D interface for the IoT, will make the physical and the digital undifferentiated, and therefore enhance our human potential to make more informed decisions with minimal mental energy and training.”

Alibaba, Deniz, Crafton: When Asia is already gone

Ten companies have been integrated at least three times: Autodesk, Bentley Systems, Block, Intel, Matterport, Naver, Netease, Paypal, Sony and Tencent.

And 19 companies are integrated at least twice: Accenture, Alibaba, Capcom, Cloudflare, Colopl, Dassault Systems, Galaxy Digital, Gree, Hexagon, Mastercard, Nemetschek, Nike,, Robinhood, Samsung Electronics, Sea, Taiwan Semiconductor Manufacturing , Visa and Vuzik.

That leaves 222 companies, allowing each fund to differentiate itself from its neighbor. But not only. Because each company has a different weight within each fund. Then the choices of investment companies can be looked at differently.

Let’s take the ten companies with the largest weightings in each of the five ETFs and remove the most popular technology players, our top three divisions (27 companies). Who do we find in these five top 10?

– Dassault Systems and Mastercard at Black Rock;

-Dassault Systems at Fidelity;

– Accenture and Qualcomm in Franklin;

– In Hand Qualcomm, Sea and Alibaba;

– Samsung Electronics, Krafton and Alibaba in Roundhill.

A total of eight companies and as many heavyweights. Including the three Asians should be followed closely.

1. Ali Baba Augmented reality (XR) used Singles Day on November 11 to introduce new “metaverse” features on its shopping platform using virtual influencers and augmented reality. But the Chinese giant is moving towards luxury with its dedicated platform Tmall Luxury Pavilionwhere this year avatars benefited from special “tokens” that gave them early access to luxury products… and every luxury brand on the planet wanted to be a part of the adventure.

2. Korean video game developer, CraftonAccording to many media, it is this company that raised 18 billion euros on the stock exchange this summer. the first virtual CEO, Ana. In fact, by absorbing all the data, it supports an artificial intelligence capable of giving informed feedback to a very real CEO. A great technological feat, which should already go much further, is to make it a kind of autonomous guide in the metaverse for all those who are lost.

3. Listed in New York, Singapore’s Sea Limited group is the boldest bet: the title has lost about 80% of its value in a year, inviting investors like Tiger or Tencent to reduce their risk. Starting with the FTX fiasco, the group invested in several projects through its investment subsidiary, including Refract’s AXIS (8.5 million investment). In video games, this motion capture technology can take the experience to the next level.

A lesson

With the failures of Meta and several major players so far, these ETFs will have only one merit: to enhance the idea that the metaverse will eventually dominate various sectors to improve the experience of meeting in the office or collaborating on projects. , in the industrial or medical sector or in the training sector.

The Metaverse market is expected to exceed $100 billion in 2022 and reach $1.5 trillion in 2029. Fortune predicts that the crypto-technical winter will not last long.

2021, the year of buzz around the metaverse. 2022 is the year of massive influx of financiers. 2023, what year?

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