The idea of the ‘metaverse’ has gained mainstream awareness in recent years, as devices that place individuals within augmented or virtual realities have grown in popularity – not to mention, Mark Zuckerberg renaming Facebook (NASDAQ:META), Inc to Meta Platforms, Inc may have also raised public discourse on the topic. With Meta’s strong year to date performance, Apple’s launch of their VR headset, the Vision Pro, and the increased discussion around Artificial Intelligence, now is an opportune time to provide a refresher on the metaverse, the opportunity it represents and how investors can gain exposure to this burgeoning technological arena.
What is the Metaverse?
The metaverse blends digital and physical interactions to create an immersive experience that simulates reality or creates a world beyond it. The metaverse is predicated on the use of multiple technological innovations working in concert to create a fulsome ecosystem, examples of these technologies include augmented reality (AR), head-mounted displays (HMDs), an AR cloud, the Internet of Things (IoT), 5G, artificial intelligence (AI) and spatial technologies.
The opportunity the metaverse presents?
During the gold rush, wealth was garnered mostly by those who sold the ‘pickaxes and shovels’ to the prospectors who dug for gold – a similar analogy can be taken when considering the progressive development of the metaverse. The opportunities the metaverse will bring are varied, the baseline being gaming and virtual spaces, to more nuanced technological advancements such as spatial computing and digital humans. Across the spectrum of hardware, software and commerce opportunities that will become available from the creation of the metaverse, established and emerging companies will develop the needed technology infrastructure to support its growth; this is where investors will benefit.
The following chart provides a brief outline of the hardware, software and commerce elements needed for the metaverse and examples of firms that are already producing a product or services in said category.
Investing in the parts, that will make the metaverse
The Fidelity Total Metaverse ETF (Ticker: FMTV) allows investors to gain exposure to diverse parts of the metaverse ecosystem, enabling access to U.S. and non-U.S. companies that provide products and services that are expected to contribute to the metaverse in areas including virtual platforms, social media, gaming, 3D software, digital assets, and virtual and augmented reality. Additionally, FMTV will also invest in companies that produce the necessary hardware and technical components needed to power the metaverse.
In looking at the recent performance of the fund, which has attained a 1-year performance track record fairly recently, it has benefited from the recent run-up in U.S. equities – specifically the technology sector – in recent months.
In conclusion, whether you are an early adopter investor that believes the metaverse is the next iteration of the internet or a future-focused investor that wants exposure to companies developing innovative solutions that will fulfill the desires of an increasingly sophisticated digital marketplace, the Fidelity Total Metaverse ETF is solution that provides comprehensive access to companies that are building the digital infrastructure of the future and are poised to be industry leaders in the years to come.
This content was originally published by our partners at the Canadian ETF Marketplace.