Mirae and Evolve list radically different Metaverse ETFs simultaneously
Canada is set to get its first two metaverse ETFs, in what is quickly shaping up to be one of the favourite thematics of 2021.
Independent firm Evolve ETF, which manages C$2B, and Mirae subsidiary Horizons ETF have listed metaverse ETFs on the same day.
- Evolve Metaverse ETF (MESH)
- Horizons Global Metaverse ETF (MTAV)
The two take very different approaches. MESH is actively managed. It invests in a high conviction portfolio of 25 global stocks. The prospectus doesn’t reveal much about how metaverse stocks are identified. It only says that Evolve uses quantitative and qualitative proprietary research.
MESH charges 0.60%.
MTAV tracks the Solactive Global Metaverse Index. Solactive uses its keyword search called ARTIS to go through public documents of companies to find metaverse stocks. Stocks are weighted by market cap, subject to a 5% threshold.
MTAV charges 0.55%.
Bernie’s commentary – I know which I’d prefer
ETF providers typically avoid launching actively managed ETFs, even when they are fully transparent and low fee. A big reason for the reluctance is that getting fund buyers – pension funds, advisers, brokers – to pick up an actively managed fund requires more research and DD on the fund buyer’s part. Fund buyers will want to research the investment strategy, the portfolio managers track records and the rest before buying an actively managed ETF. Whereas approval for index ETFs is usually a bit quicker.
So it’s interesting that Evolve has gone for active management anyway, knowing the sales process is longer. I think a likely reason is that none of the metaverse indexes on offer are any good. And looking sideways at Horizons product I can see why. Basically the whole top of the basket for MTAV is just the Nasdaq 100: Nvidia, Apple, Amazon, Facebook, Microsoft, and Google are the top six stocks. (See table above).
In Mirae and Solactive’s defence, there are very few pure-plays in the metaverse thematic (Matterport, that’s about it). It is also poorly defined. (Is it virtual reality headsets? Some spatial data? And more absorbing video games?). But even still, it looks like Solactive and Mirae could have had more definition.
So for my part, I know which of the two I’d prefer. But as they’re launching on the same day, it will be interesting to see how performance compares. A rare case study.
