Business

Retail investors are buying into metaverse ETFs in Korea


An attendee takes a selfie as she experiences ‘extreme summer 4D simulation’ with SK telecom’s immersive VR during the second day of the annual Mobile World Congress.

Matthias Oesterle | Corbis News | beautiful pictures

Metaverse exchange-traded funds are booming in South Korea as retail investors buy into funds focused on the new frontier of technology.

Metaverse broadly refers to a virtual world where humans interact through a three-dimensional avatar. In the metaverse, users can participate in activities like gaming, concerts, or live sports using a virtual reality headset like the Oculus.

South Korea’s super-reverse ETFs were the first to launch in Asia as the buzz about the next generation of the internet grew last year. An ETF is a basket of stocks or bonds that tracks a broad spectrum of market indexes and offers investors greater diversification.

According to Rahul Sen Sharma, managing partner of index provider Indxx, South Korea’s first four ETFs launched in October and attracted $100 million in capital in less than two weeks.

Korea is not alone. Metaverse ETFs are also on the rise in the US, and analysts note that more funds are coming soon.

According to data from Samsung Asset Management, the company has launched two of the ETFs listed in South Korea, as of January 19, attracting more than $1 billion in investments.

Of that, more than $800 million went into four ETFs focused on stocks related to the Korean metaverse, while more than $338 million went into more global ETFs, the data shows.

Select stocks and investment trends from CNBC Pro:

Some of the ETFs include Samsung Asset Management’s KODEX K-Metaverse Active, NH Amundi Asset Management’s Hanaro Fn K-Metaverse MZ, KB Asset Management’s KBSTAR iSelect Metaverse, and Mirae Asset Global Investment’s Tiger Fn Metaverse.

Top holdings in ETFs include technology companies and chip manufacturers as well as stocks related to the Korean entertainment industry. For example, Samsung’s metaverse ETF includes shares in Hybe, which owns the music label for hugely popular K-pop group BTS, as well as video game makers like Pearl Abyss.

Indxx’s Sharma said the K-pop industry, with its global popularity, is expected to play an “indispensable” role in developing the metaverse. He noted several recent announcements regarding K-pop metaverse infrastructure projects and non-fungible tokens. NFTs are digital tokens that represent proof of ownership of assets such as talent, collect or memes. K-pop groups and labels have launched NFT merchandise and have also held concerts and fan events in the metaverse, according to media reports.

The power of retail investment

When the metaverse ETFs launched in South Korea, retail returns followed. According to Samsung Asset Management data, more than 70% of inflows into domestic and global aggregate ETFs in South Korea have come from retail investors.

Sharma from Indxx said: “The metaverse is considered to be one of the most talked about main topics of 2021 in Korea.

“These high capital inflow numbers represent a positive outlook for the metaverse theme, complementing developments that demonstrate growing popularity among the Korean people and government,” said Sharma.

Sharma said retail investors in Asia Pacific have been driving growth in ETFs more broadly. He noted that the number of Australian retail investors in ETFs has increased by 33 per cent in the last year.

Sharma, citing a recent Euroclear report, said demand in Asia-Pacific for ETFs is expected to grow from $1.5 trillion to $5 trillion over the next five years.

In contrast, ETF ownership by US retail investors has lagged behind that of institutional investors. Investment advisors now own nearly 40% of US-listed ETFs, compared with just over 35% five years ago, according to data from Citi. Meanwhile, retail ownership has dropped from 40% five years ago to 38.5% today.

Overall, institutional investors still eclipse retail investors when it comes to total trading volume. While in the US retail investors account for about a quarter of trading activity, they account for only 5% to 7% of total European trading volume, according to Vanda Research. In China, the retail participation rate is over 60%.



Source link

news7g

News7g: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button