First Trust is entering the metaverse ETF space with its own fund, a day before Fidelity is expected to launch its competitor in the increasingly tight theme.
ARVR tracks an Indxx list of companies that provide the infrastructure underlying the metaverse’s promise to create a fully immersive internet. The index allows up to 50 holdings and requires at least $1 billion in market capitalization for inclusion.
Notably, the index is not allowed to invest directly in Chinese American depository receipts, but instead can invest in “variable interest entities,” a corporate structure that allows Chinese companies in media and telecommunications to get around the country’s ban on foreign direct investment in those and similar industries.
ARVR’s price point puts it in the high range among metaverse ETFs. The index-based ProShares Metaverse ETF (VERS) and the Roundhill Ball Metaverse ETF (METV) cost 58 and 59 basis points, respectively. At the highest end of that range, the actively managed Subversive Metaverse ETF (PUNK) charges 75 basis points.
Fidelity is expected to launch its metaverse fund on Thursday at a relatively cheap 39 basis points.