Quick take:
- First Trust has joined a string of investment management companies diving into the Web3 craze.
- The firm has launched a metaverse ETF based on the Indxx Metaverse Index.
- The index tracks the performance of companies that are involved in offering technologies that assist in creating the Metaverse.
First Trust has jumped on the metaverse bandwagon after announcing the First Trust Indxx Metaverse ETF (Nasdaq: ARVR). The exchange-traded fund will be based on the Indxx Metaverse Index, which tracks the performance of companies that are involved in offering technologies that assist in creating the Metaverse.
The new ETF launched on the Nasdaq on Wednesday with a 0.70% expense ratio, the same cost paid by Fount Metaverse ETF (MTVR) investors. On the other hand, the Pro Shares Metavesre ETF (VERS), launched in March 2022 has an expense ratio of 0.58% while Roundhill Ball Metaverse ETF (METV) costs 0.59%.
The Subversive Metaverse ETF (PUNK) is the most expensive of them all, with investors parting with 0.75% while Fidelity Investments will be offering its metaverse-themed ETF (FMET) at a relatively cheap expense ratio of 0.39%.
The Indxx Metaverse ETF specialises in companies developing the infrastructure underlying the immersive 3D world. It has set a minimum market cap of $1 billion for inclusion and a maximum limit of up to 50 companies.
Moreover, the Indxx Metavere Index does not invest directly in Chinese US depository receipts (ADRs), instead opting for variable interest entities. This allows the index to include Chinese companies in media and telecommunications.
Commenting on the (ARVR) ETF, Ryan Issakainen, CFA, Senior Vice President and ETF Strategist at First Trust said “although the Metaverse is still in its early stages, we believe this ecosystem offers tremendous opportunity for innovation, including many applications that we don’t fully appreciate today.”
Issakainen added that as a leading thematic ETF provider, his firm is excited to offer “ARVR as a way to gain exposure to stocks that may benefit from the growth and maturity of this dynamic investment theme.”
Chandan Kumar G V, Manager, Index Products at Indxx commented: “Each of our products represents a valuable opportunity that is backed by top-notch research and a robust methodology that exemplifies an innovative sector,” adding that “the Indxx Metaverse Index is a testament to this, and we are excited to bring this index to life through our relationship with First Trust.”
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