Introduction to Metaverse ETFs

Metaverse is poised to become the future of the internet, where users can collaborate, play, work and
socialize in 3D spaces. It is expected to create a new era for technology and user experiences by expanding its
coverage of sectors, like education, live entertainment, social network, hardware, user-generated experiences,
and technology infrastructure.

As a result of this visible exposure to a diverse range of sectors and returns, Metaverse ETFs have curated
their domain in the mainstream market. Metaverse ETFs are themed funds that invest in the best
performing, metaverse and related equities in the market. These ETFs offer an opportunity to the companies,
investors and varied group of asset managers who seek to capitalize their investment returns by prioritizing
moderate to high-risk levels. Metaverse ETFs also provide an appealing investment opportunity specially for
the technology investors because they provide access to a rapidly growing nascent sectors, allowing investors
to squeeze early returns and gain first mover advantage.

One of the many advantages of Metaverse ETFs is the convenience in making investment decision. Metaverse
still belong in the developing stage where the flow of information is limited. But the introduction of ETFs in
the metaverse space has removed the process of manually identifying and tracking shares from top-
performing metaverse companies.

The enormous benefits of the "Metaverse's Universe" do, however, come with several challenges that may
mislead the picture of mainstream Metaverse ETF adoption. Because the Metaverse is still in its early stages
of development, there can be no guarantees about when it will be released or how quickly it will be adopted
in the market.

Furthermore, regulatory agencies' non-bullish attitude to technological advancements and recent ETF
rejections, such as the SEC's denial of SkyRidge's Bitcoin ETF in 2021, suggest a pessimistic outlook, which
could delay Metaverse ETF approvals and limit investments to a single channel.

Finally, the metaverse may not be in the mainframe until this decade, but investment opportunities are
available on the bigger picture. Recent market volatility may distort the investors from looking at the long-
term potential, but secular growth trends, like digitalization will pave way for long-term returns.

Market Opportunities
Entertainment sector to accelerate growth!

According to the Bloomberg Intelligence, the Metaverse ETF universe is expected to reach $80 billion in
assets by 2024. This expansion is expected to be driven primarily by the live entertainment, including video
game streaming, films, music and sports that is expected to reach $200 billion by 2024. According to sources,
30 new ETFs in the entertainment space have been launched globally since the pandemic in early 2020. The
overall ETF market in the entertainment sector has attracted more than $5 billion in assets, with the United
States, South Korea, and the United Kingdom leading the way.

Virtual Reality to grow the momentum

According to Ark Invest the revenue from the virtual worlds would rise to $400 billion by 2025 from $180
billion in 2021. The scope of emerging technologies such as Virtual Reality Games and Game Engines has the
potential to expand the capabilities of the metaverse. According to Renub Research, the Global VR market is
expected to grow to $80.16 billion by 2026 from $23.70 in 2020. Furthermore, as per research from McKinsey
& Company, it is expected that metaverse will enable more virtual office environment as employers aim to
adopt hybrid virtual working environment post pandemic. The increased momentum in the Virtual Reality
will propel the demand for new ETFs into the mainstream market.

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Key Trends and Recent Developments in the Metaverse ETF space
Roundhill Investment enter Europe

On March 22, 2022, Roundhill Investment launched its Roundhill Ball Metaverse UCITS ETF (METV) on the
Deutsche Bö rse Xetra and becomes the first Metaverse ETF to list in Germany

ProShares launched new ETF

On March 17, 2022, ProShares launched Metaverse ETF (VERS), to give investors access to leading company
that are shaping the digital capabilities. The ETF tracks 40 companies across a broad range of industries,
including device makers to data processers, as well as social media, gaming, and other platforms

Positive inflow despite negative return

According to Bloomberg Intelligence report, Pure Metaverse ETFs have accumulated $247 million of inflows
(24% higher than the previous year) Year-to-February, despite YTD return of negative 15% across all ETFs.
This signals the transition of investors outlook from online-games and e-sports to live entertainment.

New ETF Launched in Hong-Kong

On February 21, 2022, CSOP AM launched the CSOP Metaverse Concept ETF (3034.HK) in Hong Kong. The
fund primarily invests in the US-listed equities with Meta Platforms (6.75%), Nvidia (6.26%), Apple Inc.
(6.12%), Advanced Micro Devices (5.96%), and Sony Group (5.64%) being its top holdings.

META to METV

Roundhill Ball Metaverse (METV) changed its ticker to METV from META on January 30, 2022, as Facebook
took over the latter. The Roundhill Ball Metaverse ETF was launched in June 2021 and currently manages
$858 million in assets. In February 2022, the ETF became the cheapest fund available by reducing its fees to
59 bps from 75 bps.

Subversive announces launch of Metaverse ETF (PUNK)

The actively managed ETF began trading on January 27 on Cboe BZX Exchange. The ETF seeks to achieve
long-term capital appreciation by investing in globally listed equity securities

Metaverse craze hits South Korea

According to data from Samsung Asset Management, the 8 Metaverse ETFs listed in South Korea have
received over $1 billion in inflows as of January 19, 2022. Retail investors have accounted for more than 70%
of inflows into domestic and global metaverse ETFs, establishing South Korea as a promising investment
destination.

Thailand based metaverse fund debuts!

MFC Metaverse Equity (M-META), a Thailand based metaverse fund, was launched by Bangkok based MFC
Asset Management in December 2021

Fount ETF launched two thematic ETFs

On 28 October 2021, Fount Investment Co., Ltd launched two new themed ETFs: The Fount Metaverse ETF
(MVTR) and the Fount Subscription Economy ETF (SUBS)

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Major Metaverse ETFs to BUY

About:
On March 17, 2021, ProShares launched its ProShares Metaverse ETF which began
trading as “VERS” on the NYSE Arca exchange. The ETF seeks investment returns
keeping the Solactive Metaverse Theme Index as its benchmark

Sector Exposure:
Some of the top sector holdings include Media & Entertainment (30.67%),
Semiconductors & Semiconductor (24.95%) and Software Services (17.78%)

Key Stats:
 The index covers a total of 40 companies that generate at least 50% of
their revenue from metaverse
 Some of the key companies in the index, include Apple Inc (8.44%),
Alphabet Inc (6.51%), Microsoft Inc (6.31%) and Meta Platforms (6.20%)
 Geographically, the U.S (86.41%) holds the largest weight, followed by
China (5.37%), Taiwan (5.14%), Singapore (1.96%) and Japan (1.13%)

About:
Roundhill Ball Metaverse ETF is one of the oldest ETFs to be launched by
Roundhill Investments in the metaverse space. The ETF was launched on June 30,
2021, and began trading as “METV” on the NYSE Arca exchange

Sector Composition:
Key sectors, include Gaming Platform (17.5%), Computing Components (19.4%),
Cloud Solutions (18.0%), Social Network (14.1%) and Others (31%)

Key Stats:
 The ETF holds $768 million of assets under management
 Companies included in the index hold a minimum of $250 million market
cap and $2 million in average daily volume over six months
 Geographically, the U.S accounts for more than 80% of the portfolio,
followed by South Korea and Singapore
 Top three key holdings, include Roblox Corp (9.23%), Nvidia Corporation
(8.34%) and Meta Platforms (7.78%)

About:
Subversive Capital Advisor LLC launched the Subversive Metaverse ETF on
January 27, 2022. The ETF began trading as PUNK on the “CBOE” exchange

Sector Exposure:
Holds 59 companies across five major sectors, including Communication Services,
Consumer Discretionary, Information Technology, Health Care, and Financials

Key Stats:
 Some of the top holdings, include Cash & Other (7.12%), Nvidia Corp
(4.15%) and Coinbase Global Inc (3.54%)
 Holds $1.25 million assets under management

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Other Metaverse ETFs

About:
On November 24, 2021, Canada’s first Metaverse ETF was launched. Evolve
Metaverse ETF announced its listing as “MESH” on the Toronto Stock Exchange.
The fund is managed Evolve Funds Group Inc.

Sector Exposure:
Key sectors, include Technology (60.88%), Communications (31.69%), Consumer
Cyclical (4.09%), and Financial (3.34%)

Key Stats:
 Holds over $13.477 million asset under management
 Some of the key holdings, include Activision Blizzard Inc (6.07%),
NetEase Inc (4.74%), Electronic Arts Inc (4.70%), and Apple Inc (4.62%)
 Geographically, The U.S (75.36%) holds the largest weight, followed by
China (13.49%), Taiwan (4.33%), Japan (4.09%) and Singapore (2.74%)

About:
Horizons Global Metaverse Index ETF was launched on November 26, 2021. The
ETF announced its listing as “MTAV” on the Toronto Stock Exchange. The ETF is
managed by Horizons ETFs Management (Canada) Inc.

Sector Composition:
Key sectors, include Digital Marketplace (20.72%), Digital Infrastructure
(20.66%), Digital Payment (17.92%), Creator Economy (16.87%), Augmented /
Virtual Reality (15.26%), and Gaming (8.58%)

Key Stats:
 The ETF holds $4.85 million assets under management
 Geographically, the U.S (78.09%) holds the largest share, followed by
China (13.46%), Japan (4.35%), Canada (1.62%), Argentina (1.03%),
Singapore (0.99%), and Britain (0.46%)
 Top holdings, include Apple Inc (6.85%), Visa Inc (6.42%) and Alphabet
Inc (5.79%)

About:
CSOP Metaverse Concept ETF was launched on February 18, 2022. The ETF
announced its listing as “3034.HK” on the Hong Kong Stock Exchange

Sector Exposure:
Key sectors, include Information Technology (60.42%), Communication Services
(28.07%), Consumer Discretionary (7.38%), and Industrials (0.77%)

Key Stats:
 Holds $9.73 million asset under management
 Top holdings include Meta Platform Inc (6.46%), Apple Inc (6.17%), and
Advanced Micro Devices (5.72%)
 Has over 43 securities