BlackRock seeks to capitalise on metaverse through new ETF

BlackRock has announced the launch of its new exchange-traded fund (ETF) as it seeks to capitalise on the success of the metaverse.

The venture capital behemoth’s investment platform, called iShare Metaverse UCITS, gives European clients targeted exposure to a wide variety of companies active in developing metaverse technologies. 

According to a statement released by BlackRock, the iShares Metaverse UCITS ETF [MTAV] will “track the STOXX Global Metaverse Index, which uses EconSight’s unique patent data analytics to identify companies that are market leaders, innovators, and specialists in the field of metaverse technologies.”

Companies are included based on the quality of their innovation activity through an assessment of the patents they file. The filing and publication of patents in a specific technology also reveal a company’s research focus and future direction of activity before revenues are able to capture the full capabilities of emerging technologies.

Furthermore, by harnessing EconSight’s patent data, the STOXX Global Metaverse Index relies on a robust methodology to select only the top 10% of companies with High-Quality Patents (HQP) within metaverse technologies. The index comprises 65 global companies ranging from the digital marketplace, gaming, healthcare, manufacturing, software as well as hardware and components. 

“This incorporates companies developing interactive virtual platforms, wearables, and immersive technologies as well as those companies providing the necessary computer processing capabilities and infrastructure.” the statement said. 

Once metaverse-related patents have been recognised, the selection of companies can be done in two different ways: namely, by assessing the number of High-Quality Patents as well as specialisation scores.

Metaverse presents new opportunities to BlackRock

As the metaverse gains momentum, with leading banks and investment companies staking their claim, it's little wonder that BlackRock has made a move to support the space with its cutting-edge products. 

The immersive virtual world which integrates digital and physical interactions is seen as the next frontier of the digital world and stands to benefit from an acceleration in investments from large technology companies, private markets, and consumer brands as new virtual applications emerge. 

Furthermore, metaverse technology facilitates an interplay between aspects of both Augmented Reality (the integration of digital information with the user’s environment in real-time) and Virtual Reality (the computer-generated simulation of a three-dimensional image or environment that can be interacted with).

Rapidly developing technology in the metaverse

With its rapidly developing technological space, the metaverse already has a predicted value of US$800mn by 2025, with an expected market size of $4-5trn by 2030. In March 2022, The metaverse-themed global exchange-traded products also hit $2bn AUM globally.

Speaking about the launch, Omar Moufti, product strategist for thematic and sector ETFs at BlackRock, explained: “We see the metaverse as the next leap forward in global communication and connectivity. It has the potential to revolutionise many sectors and processes, and reshape every facet of society, from the way we work, consume, interact, and produce. As further uses for metaverse technologies become apparent, the desire for exposure to the technology companies behind these innovations grows.”

He added: “The iShares Metaverse UCITS ETF gives investors access to a diversified portfolio of companies active in building the metaverse and applying it in their fields.”