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2 ETFs Offer More Than A Virtual Piece Of Mark Zuckerberg’s Facebook Metaverse

Published 11/04/2021, 06:04 PM

Meta Platforms (NASDAQ:FB) is the new name of Facebook, though the new ticker MVRS won't be in effect until Dec. 1, 2021. On Oct. 28, Mark Zuckerberg, the CEO of the tech giant, announced that the mammoth social media platform was changing its name, saying:

“The defining quality of the metaverse will be a feeling of presence—like you are right there with another person or in another place.”

Analysts debate whether the name change is more of a PR move to simply rebrand the company, which has recently come under scrutiny. In early October, whistleblower Frances Haugen testified before the US Senate Commerce Committee, suggesting the social media giant cares more about profits than users.

As a result, FB stock came under pressure initially. But, since the announcement, FB stock has returned around 6%. However, over the past month, the shares are still down about 1.7%.

It is not possible to know management’s exact motivation for renaming the company or how this change might affect the share price in the long run. However, analysts agree that the metaverse, “a term used to describe the internet as a 3D virtual living space,” is here to stay.

In fact, recent metrics highlight the global metaverse market, which was valued at more than $47 billion last year, is forecast to go well over $800 billion in 2028, showing a revenue compound annual growth rate (CAGR) of 43.3%. Therefore, today’s article introduces two exchange-traded funds (ETFs) that could appeal to investors wishing to participate in the potential of the metaverse.

1. Roundhill Ball Metaverse ETF

  • Current Price: $15.60
  • 52-Week Range: $13.75 – $15.60
  • Expense Ratio: 0.75 per year

The Roundhill Ball Metaverse ETF (NYSE:META) is a pure-play for investing in global businesses that are at the forefront of the metaverse market. These companies might enable computing power, provide networking, offer virtual platforms, facilitate payments, ensure cybersecurity or identity services, as well as develop the hardware that makes it possible to interact with the metaverse.

META Weekly Chart.

META, which has 41 holdings, tracks the Ball Metaverse Index. It was launched in June 2021, and therefore, has a limited performance history. The top 10 names make up about 55% of net assets of $142 million.

In terms of sectors, we see gaming platform (19.8%) followed by computing components (19.1%), cloud solutions (18.8%) and social network (11.6%). Over 81% of the companies are US-based. Others come from China (5.8%), Singapore (4.0%), Taiwan (3.7%) and others.

Leading holdings include the chip heavyweight NVIDIA (NASDAQ:NVDA); tech giant Microsoft (NASDAQ:MSFT); gaming app Roblox (NYSE:RBLX); Meta Platforms and Unity Software (NYSE:U), whose platform is used creating interactive 3D content.

Since its inception, META has returned more than 3% and hit a record high in recent days. Readers looking to prepare their long-term portfolios for the next generation of the Internet might consider buying the fund.

2. MicroSectors™ FANG+™ ETN

  • Current Price: $34.50
  • 52-Week Range: $26.68 - $127.3
  • Expense Ratio: 0.58% per year

The MicroSectors™ FANG+™ ETN (NYSE:FNGS) is an exchange-traded note that gives access to 10 leading technology names. It started trading in November 2019, and has around $76 million in assets.

As an aside, we have previously discussed differences between ETFs and ETNs. We should remind readers that ETNs carry the credit risk of the issuer, which, in this case, is the Bank of Montreal (NYSE:BMO).

FNGS Weekly Chart.

FNGS has 10 holdings and tracks the returns of the NYSE FANG+™ Index. The weighting of each stock is 10%.

The current rooster includes Meta Platforms, Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Netflix (NASDAQ::NFLX), Alphabet (NASDAQ:GOOGL), Alibaba (NYSE:BABA), Baidu (NASDAQ:BIDU), NVIDIA, Tesla (NASDAQ:TSLA) and Twitter (NYSE:TWTR).

Year-to-date, FNGS is up 22.7%. By comparison, the tech-heavy NASDAQ 100 index has returned 23.9% so far in 2021. The ETN could appeal to readers who want a targeted approach to some of the biggest tech names in the US and China. These influential and innovative market leaders will likely play leading roles in the metaverse space.

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