Ideas that have become very successful over time have almost always seemed risky or far-fetched very early on. While the Metaverse seems very odd to a lot of people, investing in it early on could prove to be very profitable down the road.
For now, roughly half of consumers know little to nothing about the Metaverse.
One of the key benefits of accessing an investment through a vehicle such as an ETF is that you can easily diversify your investment.
If an ETF or fund is actively managed, you can also take advantage of the portfolio manager’s skill when trying to outperform his or her benchmark.
We’ll cover the best Metaverse ETFs in Canada that you can access on the market today, and discuss some of their features.
What are Metaverse ETFs?
Investing your money into a vehicle that targets the Metaverse can be confusing. Because the Metaverse is still in its very early stages, most ETFs have a similar approach to investing.
Metaverse ETFs are currently investing in publicly-traded companies that are involved in the development of the Metaverse.
Best Metaverse ETFs in Canada
Since the Metaverse industry is still in its infancy, there aren’t many Canadian companies involved in it quite yet. Because of that, I’ve included some American ETFs below as well.
1. Evolve Metaverse ETF
The first fund on our list is an ETF by Evolve. MESH invests in global publicly-traded companies involved in developing the Metaverse. Although the ETF is global, it has a very heavy geographical allocation to the US.
The ETF is actively managed and has a very recent inception date. It invests in approximately 30 stock holdings. Its MER is average for an actively managed global stock fund.
MESH does not hedge out any currency fluctuations between the Canadian dollar and other currencies. It also does not pay a set distribution yield.
The ETF is still very small, which creates the risk of it closing down in the future if it fails to attract enough assets. MESH is one of the few Canadian ETF options listed on the Toronto Stock Exchange.
2. Horizons Global Metaverse Index ETF
The second fund on our list is another Canadian ETF offered by Horizons. In contrast to MESH, MTAV invests passively and aims to replicate the Solactive Global Metaverse Index. The investment mandate of MTAV is similar to the one for MESH.
MTAV also has a very recent inception date and a short performance track record. It also invests in roughly 30 stock holdings. When comparing MTAV to MESH in terms of MER, MESH offers you more for your fees because it is actively managed.
MTAV also doesn’t hedge out any currency fluctuations between the Canadian dollar and other currencies. MTAV like MESH does not pay a set distribution yield.
Since MTAV is substantially smaller than MESH, its risk of closing down early due to a small asset size is even greater.
Assuming both funds will continue to grow in assets, they are both good approaches to investing in the Metaverse through a Canadian exchange.
3. Roundhill Ball Metaverse ETF
Unique among its Metaverse ETF peers, METV is a very large ETF with an earlier inception date. It is offered by Roundhill Ball in the US and trades on the New York Stock Exchange. The ETF passively tracks the Ball Metaverse Index.
METV invests globally across approximately 13 different countries. Its mandate is to invest in globally-listed companies that are actively involved in the Metaverse.
Although METV launched before its peers, it still has a short performance track record. It also invests in approximately 40 stock holdings. Its MER is similar to the other ETFs on our list.
METV trades on the New York Stock Exchange in the US. You will have to purchase it in US dollars on the US side of your accounts.
The ETF does not hedge its currency exposure, so foreign currency fluctuations against the Canadian dollar will affect your total returns.
If you are looking to add investment exposure to the Metaverse in US dollars on the US side of your accounts, this ETF is your best option.
VERS is a Metaverse ETF trading on the New York Stock Exchange. Similar to MTAV, VERS follows a passive strategy and aims to replicate the Solactive Metaverse Theme Index. The fund invests globally but has a large bias towards US stocks.
Proshares launched VERS very recently, so the fund’s track record is very short. It invests in approximately 40 stock holdings. In terms of fees, VERS is similar to its peers but also lacks the active management that MESH offers.
Since VERS also trades on the New York Stock Exchange, it will have to be purchased in US dollars on the US side of your accounts. VERS does not hedge its currency exposure, so foreign currency fluctuations against the Canadian dollar will impact your returns.
VERS is also a tiny ETF which puts it at risk of closing down early due to asset size. If you are looking to invest in the Metaverse through US dollars, this ETF is a potential option.
5. Fount Metaverse ETF
Last on our list is the Fount Metaverse ETF. Also listed on the New York Stock Exchange in the US, MTVR is also passively managed and tracks the Fount Metaverse Index.
The ETF invests globally and follows a similar theme as the other funds on our list.
MTVR launched fairly recently and has a short performance track record. It invests in approximately 50 stock holdings at a higher MER than the other funds on our list.
MTVR is another fund that will have to be purchased in US dollars on the US side of your accounts. The ETF does not hedge its foreign currency exposure.
Since this ETF is small in size, it also comes with the risk of closing down early due to a lack of assets. If you are looking to invest in the Metaverse through US dollars, the other ETFs on our list are better options.
What are the Best Metaverse ETFs?
The best Metaverse ETF depends on whether you will be using US dollars or Canadian dollars to purchase the fund.
If you are looking to purchase a Metaverse ETF for your Canadian dollar investment portfolio, the best option is likely the MESH ETF. Although it is a small ETF, it offers active management, while Horizon’s MTAV ETF does not. Relative to MTAV, MESH is also larger in assets.
On the US side of your accounts, the best Metaverse ETF is Roundhill Ball’s METV. As one of the first Metaverse ETFs to launch, it is fairly massive in size and is offered at a comparable MER.
Risks of Investing in Metaverse ETFs
Quite a few companies have started investing large sums of money and allocating resources towards the Metaverse. If the Metaverse fails to gain traction with people over time, companies investing in it will likely underperform.
Stock investments are usually classified as having at least medium risk with most brokerages in Canada. Most of the companies involved with the Metaverse currently are technology companies.
The nature of technology companies usually makes them at higher risk than other stocks.
If you don’t have a long-term time horizon for investing, you likely shouldn’t be including Metaverse ETFs in your portfolio. Any investments into Metaverse ETFs should likely be only a niche part of your properly diversified portfolio.
How to Buy the Best Metaverse ETFs
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The Metaverse is currently one of the newest ideas in the technology space that is beginning to gain traction with investors. The best investments are usually made before a company gains mainstream success.
A lot of the companies in the Metaverse ETFs that we have covered are US technology companies. A well-built portfolio will be diversified across asset classes and across different geographies.
When creating your personal investment portfolio, make sure that you consider your goals and objectives.