With growth and technology stocks flailing this year, it’s understandable that investors are wary of assets with the disruptive label and skittish about concepts such as the metaverse.
On the other hand, buying low and selling high is the primary goal in investing, and today, market participants have ample opportunity to buy low among metaverse-related equities. For those who don’t want to stock pick, the Fidelity Metaverse ETF (FMET) is an exchange traded fund to consider.
FMET is fresh on the metaverse ETF scene, having debuted in April. FMET being a new ETF shouldn’t be pertinent to investors because any metaverse ETF is new by virtue of the fact that the investable metaverse is itself a fresh idea. It’s also one with compelling long-term potential.
“While many of these concepts are already used in gaming, the metaverse has consumer applications—imagine using a digital twin to try on clothing or shop for real estate and home décor—and the potential to transform everything from entertainment to education. Instead of reading about ancient Rome, for example, students could experience it virtually,” according to Morgan Stanley research.
What’s interesting about FMET and the metaverse investment thesis at large is that these concepts aren’t as far-flung to investors as they might think. In fact, many of the concepts underpinning the investable metaverse are already familiar to legions of investors and have been for years.
“We think the metaverse is most likely going to be a next-generation social media, streaming, gaming and shopping platform,” says internet analyst Brian Nowak. “In some ways, we already live in a metaverse, as shown by the total time spent by daily active users in the U.S. on digital platforms.”
Looking at FMET’s top 10 holdings, that group includes familiar names such as Facebook parent Meta Platforms (NASDAQ:FB), Apple (NASDAQ:AAPL), Google parent Alphabet (NASDAQ:GOOG), and Activision Blizzard (NASDAQ:ATVI), indicating that investors aren’t making an exotic wager by embracing the Fidelity ETF.
While FMET’s 58 long positions are mostly familiar companies, many have established track records of disruption, indicating that the ETF is a credible idea for patient investors willing to wait on a growth stock rebound.
“To be sure, the metaverse could eventually disrupt digital media and commerce in the same way streaming services shuttered video stores. For this reason, investors across industries should consider the long-term implications the metaverse could have for today’s stalwarts,” concludes Morgan Stanley.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
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