While growth equities in general may not be the ideal play in 2022 given that inflation and recession fears are forcing investors to play the market in safe mode, it’s an opportune time to pick up high growth opportunities at a value-oriented price.
One of the sub-sectors of the tech industry that could provide potential alpha in the future is companies that center their business models around the metaverse. It’s still a burgeoning concept, but one that offers a great degree of intrigue when it comes to tech themes that could dominate the next decade or so.
“The metaverse isn’t just a buzzword. It’s facilitating a new way for people to interact on the internet, manifesting now in gaming and social platforms,” a Forbes article noted. “If you want to add exposure to this new type of asset into your investment portfolio, it can take some time to get up to speed on all the ins and outs of the industry.”
The Whole Metaverse in 1 ETF
Speaking of exposure, ETF investors salivating at the potential can look to the Global X Metaverse ETF (VR). Per its fund description, VR seeks to invest in companies that are positioned to benefit from the development and commercialization of the metaverse.
Companies included in the fund are those involved in the development of hardware and software that allows users to experience extended digital realities, creator platforms where live streaming and other media content is shared in 3D simulations, and creator economies involving the development of applications related to digital payments, such as the creation and distribution of non-fungible tokens (NFTs) and other digital asset payment gateways. Companies involved in the digital infrastructure/hardware space, such as semiconductors, cloud computing technology, and 5G infrastructure supporting digital media consumption are also included.
Highlights of VR:
- High growth potential: The global metaverse market is expected to increase more than 50% from 2021 to 2022, exceeding $100 billion. Forecasts suggest it could surpass $1.5 trillion by 2029, highlighting the substantial room for growth.
- Expanding horizons: While early conceptions of the metaverse were centered on gaming and other forms of entertainment, there are emerging use cases for shopping and even hybrid work, suggesting that we may be just scratching the surface of potential applications.
- Unconstrained approach: The metaverse is supported by an intricate network of hardware and software providers, creators, and collaborators. VR invests accordingly, targeting companies regardless of sector or geographic categorization.
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