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Investing in Mark Zuckerberg’s vision of the Metaverse with an ETF


So there we have it, Facebook is changing its name to Meta. But there’s a lot more to it than that. As Mark Zuckerberg himself put it last week, “In our DNA we’re a company that builds technology to connect people, and the metaverse is the next frontier, just like social networking was when we got started.”

What is the Metaverse?

It’s going to sound like something out of science fiction, and certainly when I was in my early 20s and reading William Gibson books, I never thought we’d come this far, this fast, technologically. But the Metaverse is more than just Zuckerberg’s effort to reinvent Facebook and stay ahead of the game.

The term was originally coined by the Neal Stephenson novel, Snow Crash, in 1992, but it really encapsulates the next iteration of the Internet, effectively a shared online space where people can interact, a digital ecosystem that will allow us to live, work and play in a shared realm. The advent of cloud computing is facilitating its creation, and more attention has been focused on its possibilities since the first lockdowns last year demonstrated to everyone just how far the digital revolution has travelled.

Can you invest in the Metaverse?

You can’t buy shares in the Metaverse yet, but you can buy shares in companies that are playing an active role in its creation. There is Facebook – or Meta – of course, but other companies that are involved include gaming specialists like Roblox and Unity Software.

An exchange traded fund – ETF – called Roundhill Ball Metaverse (NYSE:META), has been launched to invest in a basket of stocks that are exposed to this major theme. Listed in the US, it currently has around $175m in assets under management. It tracks an index composed of 48 companies at the moment.

Top five holdings of the Roundhill Ball Metaverse ETF

  • Nvidia Corp (9.6%)
  • Microsoft Corp (5.2%)
  • Roblox Corp (4.8%)
  • Unity Software (4.4%)
  • Taiwan Semiconductor (4.04%)

Source: TrackInsight

What is an ETF?

ETFs are listed funds which trade on stock exchange like a share. That means you can trade them using a stock broker, and even put them in your ISA like you would a share. Most ETFs in Europe still track an index, which is created and calculated by a third party. The fund manager will buy the underlying stocks in order to replicate the performance of the index.

Early ETFs used to track the established stock market indexes like the FTSE 100 or the S&P 500, but ETFs like the Roundhill Ball Metaverse one are following a more thematic index which has been created to invest in stocks which are most exposed to a particular theme, in this case the emergence of Zuckerberg’s Metaverse.

It is interesting to note that Facebook fails to make it into the top 10 holdings of this ETF.

Investors will find that there is still a wider selection of thematic ETFs available on US exchanges than there are in Europe, but it should be possible to access most of these using European brokerage accounts as they are listed on the bigger stock exchanges.

Who is Roundhill Investments anyway?

Roundhill Investments is a US fund manager and a specialist in the creation of thematic ETFs. Their Metaverse ETF is just one of a number of thematic ETFs they currently manage. They include ETFs targeting the e-sports sector, sports betting, streaming, pro sports and digital infrastructure. The firm is based in New York and San Francisco, and was founded by Will Hershey (former head trader at hedge fund Yorkville Capital Management) and Tim Maloney (formerly a fixed income trader with Wells Capital).

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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