ProShares has entered the nascent market of metaverse ETFs, hoping to use its prominence in the ETF space to take market share from existing competitors.
The ProShares Metaverse ETF (VERS) debuted on the NYSE Arca Thursday with an 0.58% expense ratio.
VERS tracks a Solactive index following companies that generate at least half of their revenues from metaverse-related activity based on a scan of public company filings. The index rebalances and reconstitutes semiannually.
The metaverse already has three ETFs representing it: the Roundhill Ball Metaverse ETF (METV), the Fount Metaverse ETF (MTVR) and the Subversive Metaverse ETF (PUNK). METV is the closest comparison to VERS, as both are index-based and cost substantially the same. VERS is 1 basis point cheaper than METV, and the top holdings have substantial overlap.
The two funds share Apple, Nvidia, Meta Platforms, Unity Software and Microsoft among their top 10 holdings, with those companies amounting to 32.2% of METV’s exposure and 34.9% of VERS exposure.
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In an interview, ProShares’ Executive Director of Thematic Investing Scott Helfstein said VERS’ index leans more toward companies that are building the physical parts and data storage infrastructure needed to run the metaverse rather than firms trying to re-create their real-world brands into the online world.
He also argues ProShares’ name recognition will give it an advantage over Roundhill, Fount and Subversive Capital, the three existing metaverse fund issuers that have approximately $1.25 billion in ETF assets combined.
“The three players that are currently out there are effectively startups, and there really is no established scale player offering a product in this space,” he said.