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Metaverse Trends to Watch During 2023

1 min read · 102 views Bong-Geun Choi Dec 22, 2022

For better or worse, it was difficult to avoid the word “metaverse” during 2022. Facebook’s rebranding of itself as Meta drew attention to the metaverse concept.  In some forms, the metaverse exists today.  Augmented and virtual reality technology has created immersive experiences for individuals, while virtual worlds and experiences have been created and experienced.

 

What developments may await us in 2023?  Forbes outlined their top five metaverse trends to watch in 2023. [1]

 

Metaverse as a New Marketing Channel

Consumer-facing brands are looking to the metaverse as a new marketing channel. Fashion and apparel giants, such as Nike and Gucci have already established a presence in the metaverse. Many retailers and fashion houses have built stores in virtual worlds, such as Decentraland and Sandbox or are creating virtual clothes for avatars in video games like Fortnite.  Financial companies, such as J.P. Morgan, have built online banks where consumers may interact with digital bankers via avatars. 

 

As the walls separating the digital and physical worlds come down, businesses will likely increase their presence in the metaverse.

 

The Corporate Metaverse

Companies are creating digital twins of factory floors to test new manufacturing processes before initiating them in physical space.  They are also creating virtual representations of products to perform more realistic testing of new products before manufacturing them.

 

Companies are also creating virtual offices for remote workers and utilizing metaverse technology for training and development.

 

Web3 and Decentralization

Web3, a new iteration of the World Wide Web incorporating concepts such as decentralization, blockchain technologies, and token-based economies, is expected to grow. Many companies like Nike, Adidas, and Forever 21, have already created non-fungible tokens (NFTs) to create digital goods that can only be worn in the metaverse.  Blockchain technology may remove control of the internet from the control of large, global corporations.

 

Virtual and Augmented Reality (AR/VR)

The central premise of the metaverse is immersive experiences.  Therefore, AR and VR technologies are paramount as they are the mediums through which individuals interact with the metaverse.  Large corporations like Apple, Google, and Microsoft either currently have or are racing to get headsets to the market. 

 

Technology may increase the immersive experience of the metaverse through innovations like full-body haptic suits, and even bring smell to the virtual experience.

 

More Advanced Avatar Technology

Avatars are the mediums through which people represent themselves in the metaverse. Originally, avatars were crude, cartoon-like characters.  However, in the future, our avatars may look much more like our physical selves, if we so desire.  They may also sound like us and employ more of our unique gestures and body language. 

 

Exciting Possibilities May Lead to an Exciting Investment Opportunity

The promise of the metaverse may offer individuals an exciting investment opportunity. How may investors gain exposure to companies involved in metaverse technologies?

 

The Fount Metaverse ETF (MTVR)

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 may be an attractive vehicle to gain exposure to metaverse-related companies.

For a full list of MTVR holdings, click here.


[1] Marr, Bernard, The Top 5 Metaverse Trends in 2023, Forbes, 10/24/22.


 

Bong-Geun Choi

Chief Economist

bchoi@fountinvestment.com

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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. 

0 MTVR · SUBS
MTVR · SUBS