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Offer Your Clients Thematic Exposure with MTVR

1 min read · 195 views Bong-Geun Choi Sep 30, 2022

The Fount Metaverse ETF (MTVR) looks to invest in companies that develop, manufacture, distribute, or sell products related to metaverse technology.

 

How to Position MTVR in Your Clients’ Portfolios

With its exposure to potentially disruptive technology, we believe that investors should consider MTVR for a portion of their allocation to thematic funds. 

 

What Is a Thematic?

While there is no absolute definition, a thematic fund often provides individuals with exposure to a disruptive or high-growth trend and the potential to profit from a significant structural change in society.  Investors may choose to invest in thematic portfolios to profit from a theme or express a view or conviction.

 

We believe that MTVR satisfies these criteria for thematic exposure.

 

MTVR: Exposure to Disruptive Technology

Metaverse technology has the potential to change the way that individuals and businesses interact with each other.  It may become the next iteration of the internet, and it is tearing down the walls between the digital and physical worlds.[1]

 

MTVR: Exposure to An Industry with High-Growth Potential

Bloomberg Intelligence estimates that the market size of the metaverse may reach $800 billion by 2024.  However, when factoring in companies that manufacture the chips and hardware which will power and facilitate the metaverse, and the networking companies that will supply the bandwidth, the size of the metaverse may reach trillions of dollars.[2]

 

MTVR: Because Your Clients Are Demanding Thematic Exposure

According to a Brown Brothers Harriman study, 85% of global ETF investors plan to increase their exposure to thematic ETFs, and 38% plan to allocate 11-20% to thematics.  The study also noted that assets under management in thematic ETFs reached $285 billion by December 2021.[3]  Your clients may be looking for, or receptive to, investing in thematic ETFs.

 

MTVR: Because Spotting a Trend Is Easier Than Picking a Stock

Identifying a trend tends to be easier than picking the right stock.  It is difficult to predict which companies will be successful and which companies will fail.  Therefore, it may be better to hold a portfolio of companies involved in metaverse technology, such as the MTVR ETF.

 

Due to the potentially disruptive nature of metaverse technology and expectations of high growth for the industry, advisors may consider allocating a portion of their clients’ thematic allocation to MTVR.

 

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.

 


 


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

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

[3]   2022 Global ETF Investor Survey, Brown Brothers Harriman, 3/15/22


 

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