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Is the Roundhill Ball Metaverse ETF (METV) Right for You?

Ruchi Gupta - Author
By

Jun. 10 2022, Published 12:51 p.m. ET

The metaverse is considered the future of the internet and investors are eager to get exposure to it. Many investors are turning to metaverse ETFs for the exposure, and the Roundhill Ball Metaverse ETF (METV) ranks among the favorites. Let’s take a look at the fund’s top holdings, expense ratio, and other features to see if it’s right for you.

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A metaverse ETF seeks to give investors exposure to a portfolio of companies that stand to benefit from the growth in the new industry. These funds often hold dozens of stocks with the metaverse theme, which makes it easier for investors to get a diversified exposure at a single point.

The Roundhill Ball Metaverse ETF launched in June 2021. With more than half a billion-dollar in assets, METV is among the largest metaverse funds. Its portfolio consists of more than 40 metaverse stocks representing businesses in industries such as gaming platforms, social media, cloud solutions, and semiconductor components.

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What are the Roundhill Ball Metaverse ETF's top holdings?

The fund tracks the Ball Metaverse Index. It rebalances its portfolio quarterly. Most of the fund’s holdings are companies with more than $10 billion in market cap. Below are the fund’s top five holdings.

  • Meta Platforms (META)

  • Nvidia (NVDA)

  • Roblox (RBLX)

  • Microsoft (MSFT)

  • Autodesk (ADSK)

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Meta Platforms makes the metaverse a top priority.

Facebook parent Meta Platforms is the Roundhill Ball Metaverse ETF’s largest holding at about 10 percent of the portfolio size. The Mark Zuckerberg-led company, whose other properties include Instagram and WhatsApp, has made building the metaverse a top priority. Its efforts have helped draw significant attention to the industry.

Apart from building the virtual spaces where people would hang out or work in their avatar forms, Meta is also building the devices that people need to enter the metaverse. It has already developed platforms where people can attend church services or the gym in the metaverse.

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Nvidia is building a business metaverse.

The graphics chip maker has built a platform that it calls Omniverse, which offers tools that companies can use to develop their own metaverse environments. Nvidia also supplies chips that will be needed in many metaverse devices.

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Roblox powers metaverse games.

The metaverse concept has drawn significant interest from the gaming industry. Roblox is a game-building engine that's supporting various metaverse-oriented game projects. The other game technology stock in the Roundhill Ball Metaverse ETF’s portfolio is Unity Software (U).

Microsoft will play multiple roles in the metaverse industry.

Metaverse buildings and operations are going to fuel the demand for cloud computing resources. Microsoft is among the world’s top cloud vendors alongside Amazon (AMZN) and Google (GOOGL). Microsoft said that its acquisition of videogame developer Activision Blizzard adds a metaverse building block. Microsoft also makes HoloLens headsets, which are the kind of tools that people can use to access the metaverse.

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Autodesk’s software could be use across the metaverse industry.

In the metaverse, you can build a home for your avatar to live in or develop a venue to lease to others for events like music concerts or virtual weddings. There's also a trend where developers are creating digital versions of buildings and other infrastructures for the metaverse. Autodesk offers software for construction and engineering.

Finally, the Roundhill Ball Metaverse ETF charges an expense ratio of 0.59 percent, but it doesn't have any load fees. The metaverse industry that the fund gives investors exposure to is estimated to be worth anywhere between $8 trillion and $30 trillion by 2030.

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