MTVR in Three Bullets

The Fount Metaverse ETF (MTVR) looks to provide exposure to companies that develop, distribute, or sell products related to metaverse technology.  The investment case for MTVR can be encapsulated in three bullets which advisors may find helpful in presenting the fund to their clients:

 

  • Metaverse technology is disruptive and may change how humans and organizations interact and conduct business
  • The metaverse industry may experience strong, rapid growth
  • MTVR aims to provide exposure to companies in the metaverse industry

 

Supporting Material

For advisors looking to expand on these three bullets, the following information may prove helpful:

 

Metaverse technology is disruptive and may change how humans and organizations interact and conduct business[1]

  • Augmented reality (AR), one of the components of metaverse technology, may alter the way that individuals interact with the physical world around them
  • Virtual World technology, also known as virtual reality (VR), creates digital worlds where individuals may socialize, shop, and conduct business, among many other applications
  • Concerts, performances, digital travel, and gaming are among the many applications of AR/VR technology
  • Mirror world technology allows for the digital representation of the real world

 

The metaverse industry may experience strong, rapid growth

  • Bloomberg Intelligence estimates that the market size of the metaverse may reach $800 billion by 2024[2]
  • When factoring in companies involved in the manufacturing of chips and hardware, networking devices, and other ancillary services, Bloomberg estimates that the size of the metaverse economy may reach trillions of dollars

 

MTVR aims to provide exposure to companies in the metaverse industry

The Fount Metaverse ETF seeks to provide investment results that, before fees and expenses, generally correspond to the performance of the Fount Metaverse Index. 

 

The index was designed to measure the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology.

 

MTVR focuses on four major components of metaverse technology:[3]

  • Augmented Reality
  • Life Log
  • Mirror World
  • Virtual World

 

More information about the MTVR ETF can be found in the MTVR Investment Case and on the MTVR fund page.

 


 


[1] For more information on the uses of metaverse technology, please see the MTVR Investment Case

[2] Investing in the Metaverse, Bloomberg Intelligence, 7/1/21

[3] For further information on these components, please see the MTVR Investment Case

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Bong-Geun Choi Chief Economist

Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 855-425-7426 or visit our website at www.fountetfs.com. Read the prospectus or summary prospectus carefully before investing.

Exchange Traded Concepts, LLC. serves as the investment advisor to the Funds. The Funds are distributed by SEI Investments Distribution Co., (SIDCO) 1 Freedom Valley Drive, Oaks, PA 19456. SIDCO is not affiliated with Exchange Traded Concepts, LLC. or Fount Investment Co. Ltd.

Risk Disclosure:

 

Investing involves risk, including possible loss of principal. There is no guarantee the Funds will achieve their stated objectives. In addition to the normal risks associated with investing, international investments may involve the risk of capital loss from unfavorable fluctuation in currency values, differences in generally accepted accounting principles, or social, economic, or political instability in other nations. Emerging markets involve heightened risks related to the same factors, as well as increased volatility and lower trading volume. 

 

The Funds’ concentration in an industry or sector can increase the impact of, and potential losses associated with, the risks from investing in those industries/sectors. For MTVR, the Fund may be concentrated in the entertainment and interactive media & services industries. The entertainment industry is highly competitive and relies on consumer spending and the availability of disposable income for success, which may cause the prices of the securities of companies to fluctuate widely. The prices of the securities of companies in the interactive media & services industry are closely tied to the overall economy's performance. Changes in general economic growth, consumer confidence, and consumer spending may affect them. MTVR may also be subject to the specific risks associated with metaverse companies. These risks include but are not limited to small or limited markets, changes in business cycles, world economic growth, technological progress, rapid obsolescence, and government regulation. Smaller, start-up companies tend to be more volatile than securities of companies that do not rely heavily on technology. Metaverse Companies may rely on a combination of patents, copyrights, trademarks, and trade secret laws to establish and protect their proprietary rights. There can be no assurance that these steps will be adequate to prevent the misappropriation of their technology or that competitors will not develop technologies that are equivalent or superior to such companies’ technology.

 

For SUBS, the Fund may be concentrated in the software industry. Technological changes, pricing, retaining skilled employees, changes in demand, research & development, and product obsolescence can affect the profitability of software companies causing fluctuations in the market price of company securities. 

 

Both Funds are subject to communication services sector risk, which can involve the same risks as being concentrated in the software industry. Network security breaches, potential proprietary or consumer information theft, or service disruption can negatively affect companies’ stock prices.

 

The Funds are non-diversified. The Funds are new and have limited operating histories for investors to evaluate. New and smaller funds may not attract sufficient assets to achieve investment and trading efficiencies. In addition to the normal risks associated with investing, investments in smaller companies typically exhibit higher volatility.