Metaverse ETFs – The boom in South Korea

In South Korea, Metaverse exchange-traded funds are booming as retail investors purchase funds focused on the new frontier of technology.

The metaverse, also known as the virtual world, is a three-dimensional online environment where humans interact through avatars. Users can engage in gaming, concerts, or live sports in the metaverse. People often compare it to the internet, but the two are not the same. The internet is a collection of networks that connects computers, while the metaverse is a platform where people can experience unique virtual experiences.

In his novel Virtual Light, science fiction writer William Gibson conceived the first virtual world. Today, the most well-known is likely Second Life, a 3D platform where users can build and customize their avatars.

South Korea’s ETFs were the first to launch in Asia as the talk around the next internet generation increased last year. ETFs are a basket of bonds or stocks that broadly track market indices and present investors with more diversification.

Overview of the metaverse in Asia

South Korea’s first four ETFs launched in October last year and drew inflows of $100 million in two weeks. According to Rahul Sen Sharma, managing partner of index provider Indxx, South Korea isn’t alone in this. ETFs have also spread in the U.S., and analysts stated more would launch soon.

Some ETFs include N.H. Amundi Asset Management’s Hanaro Fn K-Metaverse MZ and Samsung Asset Management’s KODEX K-Metaverse Active. It also has K.B. Asset Management’s KBSTAR iSelect Metaverse and Mirae Asset Global Investment’s Tiger Fn Metaverse.

Top holdings include chipmakers, tech companies, and South Korea’s entertainment industry stocks. For example, Samsung’s ETF has shares of Hybe. It owns the music label for hugely popular K-pop group BTS and video game makers such as Pearl Abyss.

Indxx’s Sharma said the K-pop industry might play an “integral” role in developing the virtual world. He noted several recent K-pop infrastructure projects and NFTs announcements.

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