BlackRock Bets on Metaverse’s Future With New ETF

The world’s largest asset manager BlackRock has recently launched a new exchange-traded fund (ETF) in the US that invests in companies at the forefront of metaverse development worldwide.

Despite concerns that the hype surrounding the metaverse has faded among institutional investors, BlackRock’s thematic equity fund is targeting tech firms with exposure to this emerging technology. In this way, the investment giant is betting on the metaverse’s potential to transform the future of entertainment, commerce, and social interaction.

The iShares Future Metaverse Tech and Communications ETF (IVRS) will invest in firms that have a significant impact on the metaverse, including virtual platforms, social media, gaming, 3D software, digital assets, and VR/AR. The ETF’s holdings are led by Meta, Apple, Nvidia, Netease, Roblox, Tencent, and Unity Software, with these seven companies accounting for the largest portion of the fund’s assets.

To identify potential investment opportunities in the metaverse, BlackRock recommends focusing on companies that provide essential components for developing glasses and headsets that can be used to access metaverse-related services. Creating wearable and fashionable AR glasses with metaverse functionalities will require new chipsets, batteries, and lenses.

“Once the hardware exists, we look to the services that can be accessed by the new devices, and the software that will shape the metaverse. We also like companies poised to play a key role in “building” the metaverse, designing and creating virtual worlds,”

wrote Reid Menge, BlackRock Technology Equity Team, in a blog post.

According to CoinDesk, BlackRock’s recently launched ETF will be vying for market share against competitors, such as the Global X Metaverse ETF (VR), Roundhill Ball Metaverse ETF (METV), and Fidelity Metaverse ETF (FMET), all of which experienced declines in value over the past year.

As a nascent technology, the metaverse has already piqued the interest of investors who have poured billions of dollars into its development. Its potential to transform traditional industries and markets, including finance, banking, retail, education, health, and fitness, among others, is immense. In 2022 alone, the metaverse and web3 startups raised over $7 billion.