As the metaverse theme gains traction, Sachin Bansal’s Navi Mutual Fund is the first to capitalise by filing initial papers for its proposed metaverse ETF Fund of Fund with SEBI.
According to the Scheme Information Document (SID), Navi Metaverse ETF Fund of Fund (FoF) is an open-ended scheme will allocate 95-100 per cent in units of overseas ETFs that invests in companies engaged in Metaverse.
Overseas ETFs
The indicative list of overseas ETFs in which the scheme may invest include “Proshares Metaverse ETF” and Roundhill Ball Metaverse ETF”.
The "Metaverse" may be defined as a successor to the current internet that will be interoperable, persistent, synchronous, open to unlimited participants with a fully-functioning economy, and an experience that spans the virtual and 'real' world, said Roundhill Investments.
Top index constituents
The latest fact-sheet of Proshares Metaverse ETF revealed that the top-10 weighted companies are: Apple Inc, Alphabet Inc, Microsoft Corp, Meta Platforms Inc, Nvdia Corp, Himax Technologies, Amazon, Vuzlx Corp, Snap Inc and CEVA Inc. For Roundhill Ball Metaverse ETF, Roblox Corp, Meta Platforms, Nvdia, Unity Software Inc, Microsoft Corp, Snap Inc, SEA Ltd, Amazon Inc, Apple Inc and Autodesk Inc are the top-10 weighted companies.
According to Navi’s Metaverse ETF, the benchmark would be Solactive Metaverse Theme Index, which is designed to track the performance of companies that have, or are expected to have, significant exposure to the provision of products and/or services that contribute to the metaverse industry.
According to the SID, the minimum application amount for Navi Metaverse ETF FoF will be ₹500 and in multiples of ₹1. The scheme will invest maximum of $300 million per mutual fund in overseas ETF within the overall industry limit of $1 billion.
The riskometers of the scheme indicates “very high” risk category and the scheme will be managed by Aditya Mulki.
Blockchain fund from Aditya Birla
Meanwhile, Aditya Birla Sun Life Mutual Fund has also filed SID with SEBI for Blockchain and Virtual Digital Assets ETF FoF. The open-ended FoF scheme will invest up to 95-100 per cent in the units of ETFs focused on the global blockchain theme (including virtual digital assets such as crypto and NFTs).
The minimum application amount during the new fund offer period will be ₹100 and in multiples of ₹1 thereafter.
Investment avenues
The indicative list of ETFs in which Aditya Birla Sun Life Blockchain and Virtual Digital Assets ETFs FoF may invest include: Amplify Transformational Data Sharing ETF, Siren Nasdaq NexGen Economy ETF, First Trust Indxx Innovative Transaction & Process ETF, Bitwise Crypto Industry Innovators ETF,Global X Blockchain ETF, Invesco CoinShares Global Blockchain UCITS ETF, VanEck Digital Transformation ETF, First Trust SkyBridge Crypto Industry and Digital Economy ETF, ProShares Bitcoin Strategy ETF and Valkyrie Bitcoin Strategy ETF.
According SID of Aditya Birla Sun Life’s ETF, “The technology is new and many of its uses may be untested. The mechanics of using distributed ledger technology to transact in other types of assets, such as securities or derivatives, is less clear. There is no assurance that widespread adoption will occur. A lack of expansion in the usage of blockchain technology could adversely affect an investment in the fFund.”
While the MSCI ACWI IMI Blockchain Economy Index would be the benchmark for the FoF, Vinod Bhat would be the fund manager.
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