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Metaverse Stocks

Top 5 Holdings of MTVR

Data as of 09/30/2022

Holdings Subject to Change

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AAPL

11.81%

Apple Inc.

Technology

NASDAQ

Apple, Inc. engages in the design, manufacture, and sale of smartphones, personal computers, tablets, wearables and accessories, and other varieties of related services. It operates through the following geographical segments: Americas, Europe, Greater China, Japan, and Rest of Asia Pacific. The Americas segment includes North and South America. The Europe segment consists of European countries, as well as India, the Middle East, and Africa. The Greater China segment comprises China, Hong Kong, and Taiwan. The Rest of Asia Pacific segment includes Australia and Asian countries. Its products and services include iPhone, Mac, iPad, AirPods, Apple TV, Apple Watch, Beats products, AppleCare, iCloud, digital content stores, streaming, and licensing services. The company was founded by Steven Paul Jobs, Ronald Gerald Wayne, and Stephen G. Wozniak in April 1976 and is headquartered in Cupertino, CA. more

GOOGL

4.20%

Alphabet Inc. Class A

Technology

NASDAQ

Alphabet, Inc. is a holding company, which engages in the business of acquisition and operation of different companies. It operates through the Google and Other Bets segments. The Google segment includes its main Internet products such as ads, Android, Chrome, hardware, Google Cloud, Google Maps, Google Play, Search, and YouTube. The Other Bets segment consists of businesses such as Access, Calico, CapitalG, GV, Verily, Waymo, and X. The company was founded by Lawrence E. Page and Sergey Mikhaylovich Brin on October 2, 2015 and is headquartered in Mountain View, CA. more

META

3.45%

Meta Platforms Inc. Class A

Technology

NASDAQ

Meta Platforms, Inc., engages in the development of social media applications. It builds technology that helps people connect, find communities, and grow businesses. It operates through the Family of Apps (FoA) and Reality Labs (RL) segments. The FoA segment consists of Facebook, Instagram, Messenger, WhatsApp, and other services. The RL segment includes augmented and virtual reality related consumer hardware, software, and content. The company was founded by Mark Elliot Zuckerberg, Dustin Moskovitz, Chris R. Hughes, Andrew McCollum, and Eduardo P. Saverin on February 4, 2004, and is headquartered in Menlo Park, CA. more

RBLX

2.65%

Roblox Corp. Class A

Technology

NYSE

Roblox Corp. engages in the provision of online gaming services. Its platform consists of Roblox Client, Roblox Studio, and Roblox Cloud. Roblox Client is an application that allows users to explore 3D digital worlds. Roblox Studio is the toolset that allows developers and creators to build, publish, and operate 3D experiences and other content accessed with Roblox Client. Roblox Cloud includes the services and infrastructure that power the human co-experience platforms. The company was founded by Erik Cassel and David B. Baszucki in March 2004 and is headquartered in San Mateo, CA. more

PINS

2.59%

Pinterest, Inc. Class A

Technology

NYSE

Pinterest, Inc. engages in the operation of a pinboard-style photo-sharing website. It allows users to create and manage theme-based image collections such as events, interests, and hobbies. The company was founded by Benjamin Silbermann, Paul C. Sciarra, and Evan Sharp in October 2008 and is headquartered in San Francisco, CA. more

MSFT

10.06%

Microsoft Corporation

Technology

NASDAQ

Microsoft Corp. engages in the development and support of software, services, devices, and solutions. It operates through the following business segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment consists of Office Commercial (Office 365 subscriptions, the Office 365 portion of Microsoft 365 Commercial subscriptions, and Office licensed on-premises), Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, and Skype for Business, Office Consumer, including Microsoft 365 Consumer subscriptions, Office licensed on-premises, and other Office services, LinkedIn, including Talent Solutions, Marketing Solutions, Premium Subscriptions, Sales Solutions, and Learning Solutions, Dynamics business solutions, including Dynamics 365, comprising a set of intelligent, cloud-based applications across ERP, CRM, Customer Insights, Power Apps, and Power Automate, and on-premises ERP and CRM applications. The Intelligent Cloud segment consists of Server products and cloud services, including Azure and other cloud services, SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (CALs), and Nuance and GitHub, Enterprise Services, including Enterprise Support Services, Microsoft Consulting Services, and Nuance professional services. The More Personal Computing segment consists of Windows, including Windows OEM licensing and other non-volume licensing of the Windows operating system, Windows Commercial, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings, patent licensing, and Windows Internet of Things, Devices, including Surface and PC accessories, Gaming, including Xbox hardware and Xbox content and services, comprising digital transactions, Xbox Game Pass and other subscriptions, video games, third-party video game royalties, cloud services, and advertising, Search and news advertising. The company was founded by Paul Gardner Allen and William Henry Gates, III in 1975 and is headquartered in Redmond, WA. more

GOOGL

4.46%

Alphabet Inc. Class A

Technology

NASDAQ

Alphabet, Inc. is a holding company, which engages in the business of acquisition and operation of different companies. It operates through the Google and Other Bets segments. The Google segment includes its main Internet products such as ads, Android, Chrome, hardware, Google Cloud, Google Maps, Google Play, Search, and YouTube. The Other Bets segment consists of businesses such as Access, Calico, CapitalG, GV, Verily, Waymo, and X. The company was founded by Lawrence E. Page and Sergey Mikhaylovich Brin on October 2, 2015 and is headquartered in Mountain View, CA. more

Subscription Stocks

Top 5 Holdings of SUBS

Data as of 09/30/2022

Holdings Subject to Change

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AMZN

3.39%

Amazon.com, Inc.

Consumer Non-Cyclicals

NASDAQ

Amazon.com, Inc. is a multinational technology company, which engages in the provision of online retail shopping services. It operates through the following business segments: North America, International, and Amazon Web Services (AWS). The North America segment includes retail sales of consumer products and subscriptions through North American-focused websites such as www.amazon.com and www.amazon.ca. The International segment is engaged in retail sales of consumer products and subscriptions through internationally-focused websites. The Amazon Web Services segment consists of the global sales of compute, storage, database, and AWS service offerings for start-ups, enterprises, government agencies, and academic institutions. The company was founded by Jeffrey P. Bezos in July 1994 and is headquartered in Seattle, WA. more

META

2.86%

Meta Platforms Inc. Class A

Technology

NASDAQ

Meta Platforms, Inc., engages in the development of social media applications. It builds technology that helps people connect, find communities, and grow businesses. It operates through the Family of Apps (FoA) and Reality Labs (RL) segments. The FoA segment consists of Facebook, Instagram, Messenger, WhatsApp, and other services. The RL segment includes augmented and virtual reality related consumer hardware, software, and content. The company was founded by Mark Elliot Zuckerberg, Dustin Moskovitz, Chris R. Hughes, Andrew McCollum, and Eduardo P. Saverin on February 4, 2004, and is headquartered in Menlo Park, CA. more

TMUS

2.54%

T-Mobile US, Inc.

Telecommunications

NASDAQ

T-Mobile US, Inc. engages in the provision of wireless communications services under the T-Mobile and MetroPCS brands. It offers postpaid and prepaid wireless voice, messaging and data services, and wholesale wireless services. The company was founded in 1994 and is headquartered in Bellevue, WA. more

Investment Ideas

Virtual World: A Concept of the Metaverse

What is a virtual world? How can you access it? Do virtual worlds offer investment opportunities?

 

What Is a Virtual World?

A virtual world is a computer-simulated environment populated by multiple users. They can create personal avatars to explore virtual spaces and interact with other users. There is wide range of virtual worlds to choose from, and they can be modeled after the real world or fantasy in nature.

 

How Can One Access the Virtual World?

Virtual worlds are commonly associated with MMOGs (massively multiplayer online games) like MineCraft. However, virtual worlds have other applications like:

 

Entertainment: Concerts, plays, and other performances may be created in virtual worlds. Lil Nas X and Ariana Grande have performed virtual concerts.
Workplace: Individuals from all around the world, via their personal avatars, can work in virtual offices and conference rooms.

Education: Virtual training applications may include military training through simulations of warfare and medical training through simulated operating or emergency rooms.

 

How Can One Make Money from the Virtual World?

Virtual worlds can offer real life profit. Some examples include:

  • A fee to access to a virtual world
  • Advertisements
  • Sale of products exclusive to virtual worlds (stickers, skins for avatars, etc.)
Subscription Business Model Benefits

More and more consumers are gaining access to at least one type of subscription service. There are obvious, potential benefits to offering subscriptions because of this consumer demand.

 

Economical Benefits

Subscriptions have the potential to provide regular, recurring income streams for a company. More predictable cash flows may lead to better financial forecasting because a company can better predict portions of its revenue stream. Additionally, subscriptions may offer additional revenue streams because companies can reach consumers who prefer flexible forms of consumption rather than outright purchase of a product or service.

 

Customer Engagement

Subscriptions give companies the opportunity to have regular touchpoints with their customers as they deliver a product or service regularly. Gathering customer preferences may help companies customize product offerings and services. Increased engagement and greater customization may lead to higher customer loyalty.

Changes After COVID-19

The COVID-19 pandemic that struck the world forced individuals and companies alike to adjust and adapt. How did the pandemic’s restrictions alter our perceptions of the global workforce? What businesses experienced growth during lockdowns?

 

Metaverse to the Rescue

The COVID-19 pandemic essentially forced majority of the world’s workers to work remotely. Surprisingly, a study from Apollo Technical showed that more than half of employees working from home did the same amount of work as they would do in the office in either equal or less time. Although people found WFH to be constructive, a study from AT&T indicated that employees rank their social work relationships equally as important as the work itself. Advancements in metaverse technologies may cater to both these demands. One social networking company created a virtual workroom where users, with the help of virtual reality headsets, can meet in virtual conference rooms or offices, and collaborate on shared whiteboards or documents. This allows for more collaboration and creativity even when working remotely.

 

Growth in the Subscription Economy

Zuora stated that four out of five companies that offered subscription-based services grew during the period with the most severe lockdowns. Subscriptions increased significantly in video streaming (+400%), digital news and media (+110%), and e-learning (+80%). Even when restrictions lifted, consumers stuck with the subscription model. Business models quickly adapted to this new consumer interest. Hard-hit industries, like restaurants and lodging, started selling meal plans and hotel room packages. Additionally, industries that were not known for subscription plans, like automobile makers and industrial manufacturers, began to offer subscription-based plans. UBS estimates that the subscription economy may grow to $1.5 trillion by 2025.

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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. 

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