The enthusiasm of the metaverse is slowly spreading in the exchange-traded fund industry. Part of the reason for the slow uptake may be because, from an investment perspective, no one can agree on what it is.

There are no fewer than six ETFs with “metaverse” in their name. And that’s about all they share regarding wallets. While each fund offers its own angle, collectively they only have three stocks in common: Apple Inc., Snap Inc. and Take-Two Interactive Software Inc.

The seven ETFs, their assets under management, and their start dates are as follows:

Roundhill’s METV leads the pack in size, and was first out, launching several months before the next entrant and amassing nearly $489 million in assets. The smallest is PUNK, with less than $1 million in assets under management. The number of shares in each fund ranges from 41 to 53 securities. All funds in the category except PUNK Tracking Indices.

Performance hasn’t been impressive. Year-to-date, METV and MTVR are down 44.86% and 33.5%, respectively, while the broad global market represented by the iShares MSCI ACWI ETF (ACWI) it has dropped only 18.93%.

Over the 12-month period, METV was down more than 45% compared to a loss of less than 18% for ACWI. In the short term, the past one and three month periods, metaverse funds and ACWI have performed similarly.

So far this year, almost all funds have seen modest inflows, except for the two funds that were listed before the start of the year. METV has seen exits of almost $26 million, while MTVR lost almost $3 million.

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The three stocks that metaverse ETFs have in common may not seem on the surface to be metaverse stocks in the manner of Facebook parent Meta Platforms Inc., which is staking its future on the virtual industry.

Apple, simply because of its size and the scope of its business, appears in countless thematic ETFs, albeit usually with limited weighting so that it doesn’t dominate the fund. Snap, on the other hand, is primarily a social media company. Finally, Take-Two Interactive is a holding company that publishes video games under multiple labels.

Apple’s weightings in the funds range from 3.55% in PUNK to 11.88% in MTVR. For Snap, the range is 0.46% on PUNK vs. 3.79% on METV, while the weights on Take-Two range from 1.74% on VERS to 5.13% on VR.

Apple has a variety of initiatives related to the metaverse, but has been fairly conservative in its approach to the space. A ComputerWorld article notes that the company opted out of the Metaverse Standards Forum, an organization dedicated to improving interoperability standards to create an open metaverse. Members include big names like NVIDIA, Meta (formerly Facebook), and Adobe, as well as a number of standards organizations.

At least one venture capitalist and metaverse expert has accused Apple of hindering metaverse development. Matthew Ball told CoinDesk TV that Apple does not allow crypto-based virtual worlds and limits its users’ access to the metaverse.

Meanwhile, Snap CEO Evan Spiegel told TheVerge.com that the term “metaverse” was ambiguous and hypothetical, and that the metaverse companies they talk about in pitches don’t yet exist. He indicated that his company is targeting augmented reality, which Spiegel says 250 million people actively use daily on his company’s Snapchat app.

Finally, Take-Two CEO Strauss Zelnick has expressed skepticism about blockchain-based companies operating in the metaverse, although he is a strong believer in the broader concept of the metaverse, noting that his own company has built strong metaverses in their games, according to Video Games. Chronicle.

The fact that there is some ambivalence about the metaverse among the three companies that all existing metaverse funds agree are representative of the space is interesting and suggests that the space is still establishing its identity. Although the metaverse is one of the hottest topics in the conversation, the lack of definition can be a hindrance to the growth of ETFs that cover the category and the topic itself.

Contact Heather Bell at heather.bell@etf.com

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