By George Ward
According to reports, Blackrock, the world’s largest asset manager, has launched a metaverse-focused exchange-traded fund (ETF). Blackrock joins a growing list of institutional players in the quest to offer metaverse-based financial products.
Introducing Blackrock’s Metaverse-Themed ETF
As one of the largest multinational investment firms, Blackrock seeks to venture into the digital asset landscape by launching its financial products. The launch of the metaverse-theme ETF by the company is to allow clients to invest in the metaverse and explore opportunities in the virtual space fund.
Furthermore, the metaverse-based equity fund is designed to attract companies seeking further inroads into the metaverse environment. Accordingly, the fund is linked to the Morningstar Global Metaverse and Virtual Interaction Select index.
At the time of writing, data indicates that the new fund accumulated a net asset of roughly $5.02 million as of February 17. Additionally, data from the same period shows that close to 72% of the Index’s net consists of United States-listed equities.
However, other countries represented in the fund include China (10.2%), Japan (8.2%), France (5.1%), and South Korea (3.6%). Moreover, the data also revealed that most of the allocation in the information technology industry is dumped in favor of stocks like Apple, Meta Platforms, Roblox, Nvidia, and others.
In October 2022, Blackrock was rumored to have released a metaverse-themed NFT, which signifies that the speculations were correct, given the latest development. In addition, this also suggests that the firm is the latest entrant into the metaverse thematic ETF market in the United States.
Per reports, Roundhill Ball Metaverse ETF is the largest metaverse-based ETF among others.
The $300 Million Participant Requirement
Furthermore, reports indicate that the new fund has a $300 million market capitalization requirement with a minimum of $2 million in trading volume. Companies must meet this requirement before being allowed to participate.
The Blackrock ETF product will have a rating system in which listed firms are assigned to at least one of the six relevant scores tied to the metaverse thematic ETF. In addition, the six scores in the metaverse sub-theme are Wearable Technology and VR/AR, 3D Rendering and Simulation Software, Digital Assets and Payments, Metaverse Platform Immersive Gaming, and Enhanced social media.
Moreover, after the issuance of the scores, Blackrock will then evaluate the company’s potential to profit from any sub-theme. The evaluation will explore the five-year prospect of the company’s revenue from among the sub-theme.
Depending on the revenue level of the sub-theme, the Index will then rate them by tier, either as tier one or tier two companies. As revealed by Blackrock, the index fund will undergo annual rebalancing every December to determine the profitability of the sub-themes.