For the time being, I think a speculator can benefit from the volatility on the short or long side. In the long term, it will all depend and how successful the metaverse will actually be. I personally believe this strategy will remain more volatile than QQQ in the current macro environment, possibly underperforming it in the short term. That said, I believe recent months offered a glimpse into how serious METV's drawdowns can be, both from an absolute and relative perspective, which makes me wonder how volatile this strategy will be going forward. To put METV's performance into perspective, a $100 investment in this ETF at inception would now be worth ~$73.94, which is a terrible relative and absolute return.Īs we do not have much data on METV so far, I think it is hard to assess the fund's performance over a long period of time. Over that period, QQQ outperformed BOTZ by over ~23 percentage points. I have compared below METV's price performance against the Invesco QQQ ETF (NYSEARCA: QQQ) over the last 9 months to assess which one was a better investment. Moreover, a higher interest rate in developed markets clearly doesn't bode well for high PE stocks, which makes the bullish thesis risky in my opinion. (FB), most of the portfolio seems to be overvalued. While some of them are attractively valued, such as Meta Platforms Inc. After looking at the list of constituents, I can say that these businesses are among the greatest firms in the world and clearly have a moat. According to data from Morningstar, the fund currently trades at a price-to-book ratio of ~5 and an average price-to-earnings ratio of ~23. Since we are dealing with equities, one important characteristic is the portfolio's valuation. In my opinion, METV is pretty well-diversified, as I feel there are a limited number of companies in this niche at the moment. ![]() The top 10 holdings represent ~44% of the portfolio, with no single stock weighting more than ~9%. The fund is currently invested in ~43 different stocks. Some investors prefer a higher exposure to small- and mid-cap stocks given their potential to outperform large-caps over a long period of time. ![]() At the same time, small-cap issuers are underrepresented given the low weight. It is interesting to see that METV invests ~66% of the funds in growth stocks, which are generally more volatile than value stocks. The second-largest allocation is large-cap blend equities, which account for 25% of total assets. Large-cap firms are generally classified as companies with a market cap above $10 billion. METV invests ~46% of funds in large-cap growth stock, characterized as large-sized companies where growth factors predominate. In terms of geographical distribution, nearly ~81% of the fund is invested in the US, followed by Singapore (~4.6%) and South Korea (~4%). In total, the top 3 sectors account for ~55% of the fund’s total assets. Portfolio Compositionįrom the sector allocation chart below, we can see that the fund places a high weight on companies offering Gaming Platforms (~20%), followed by Computing Components providers (~19%) and companies developing Cloud Solutions (16%). If you want to learn more about the strategy, please click here. This includes companies involved in computing, networking, virtual platforms, interchange standards, and payments. The strategy seeks to get exposure to the Metaverse, which may be characterized as a replacement for the present internet providing an experience that interconnects the virtual and real worlds. The Roundhill Ball Metaverse ETF tracks the Ball Metaverse Index. That said, METV can be a great choice for speculators looking to exploit the strategy's volatility in the short term. If we look at valuations across the portfolio, I believe many constituents are overvalued, and long-term investors would be better off holding long-term dated call options rather than buying the underlying stock. Despite the exciting prospects, I believe the market is still evolving, and it is hard to pick the winners as of now. Emerging technologies such as virtual reality and game engines allow the Metaverse to take form and grow as they seek to expand the capabilities of a virtual world.īased on data from Bloomberg Intelligence and Ark Invest, the Metaverse is expected to be one of the fastest-growing tech segments, and to more than double by 2025. The Roundhill Ball Metaverse ETF ( NYSEARCA: METV) is designed to offer investors exposure to the Metaverse. Tolgart/E+ via Getty Images Investment Thesis
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |