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The metaverse is an expanding, though still nascent investment theme, and with those two points in mind, exchange traded funds issuers are getting in on the metaverse game.
That includes Fidelity, which launched the Fidelity Metaverse ETF (FMET) last month. The rookie ETF follows the in-house Fidelity Metaverse Index and arrives at a time when many investors are just starting to get acquainted with the metaverse investment thesis.
Investors considering FMET should realize that patience is likely to be a virtue when it comes to metaverse investing. There will be inevitable bumps along the way, and FMET member firms won’t move up in straight-line fashion, but the long-term outlook is bright.
“There are billions of dollars of projected revenue expected to be created in the metaverse in the years to come, and with so much potential for growth, it’s easy to see why investors would want to get involved,” according to J.P. Wealth Management.
One of the interesting points about metaverse investing is that it’s a compelling mix of familiar, mature, large- and mega-cap technology companies and smaller companies with disruptive and innovative growth labels.
“The metaverse is ruled by technology companies and digital creators, so whether people are looking to virtually engage as part of their social lives, careers, or even send money to a friend in another part of the world, their ability to do those things will depend on the companies and innovators that offer the tools to do that,” adds J.P. Morgan.
Specific to FMET, Fidelity allocates about 14% of its total weight to Meta Platforms (NASDAQ: FB), Apple (NASDAQ: AAPL), and semiconductor behemoth (NASDAQ: NVDA). Additionally, FMET taps into the metaverse investment theme’s international opportunities. For example, Chinese internet titans Tencent (OTC: TCEHY), Baidu (NASDAQ: BIDU), and JD.com (NASDAQ: JD) combine for about 7% of the FMET portfolio.
Some of the elements of traditional tech in FMET are more relevant than many novice investors realize. In fact, the fund’s hardware exposure is highly relevant in articulating the long-term metaverse thesis.
“We can’t have virtual worlds without real-world, hold-it-in-your-hands technology, like smartphones, computers, virtual reality headsets, semiconductors, and the latest chips that offer high speeds and realistic graphics. Would-be metaverse investors can look to companies involved in the manufacture and development of the latest hardware necessary to bring citizens into the virtual world, sometimes in 3D,” concludes J.P. Morgan.
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