Fidelity® Metaverse ETF (FMET)

Fidelity® Metaverse ETF: An Overview

Profile:

The Fidelity® Metaverse ETF (FMET) is an actively managed fund that invests in companies involved in the development and adoption of the metaverse. FMET focuses on sectors like VR/AR, gaming, social media, and blockchain technology. The ETF uses thematic investing in a multi-factor approach focusing on future growth potential alongside fundamentals.

Objective:

FMET seeks long-term capital appreciation by investing in companies shaping the metaverse ecosystem.

Issuer:

Fidelity Investments

• Reputation: Fidelity Investments is a well-established and reputable financial services company with over 70 years of experience.
• Reliability: As of June 30, 2023, Fidelity manages over $11.4 trillion in assets.
• Management: The ETF is actively managed by a team of experienced portfolio managers at Fidelity.

Market Share:

FMET launched in December 2022 and has gathered $198 million in assets under management with a 1.9% weighting in Metaverse-related ETFs as of October 26, 2023.

Total Net Assets:

As of October 26, 2023, FMET stands at $198 million in total net assets.

Moat:

FMET's competitive advantages include:

• Active Management: The flexibility to adapt to the evolving metaverse landscape.
• Thematic Expertise: Fidelity's research team focuses on identifying disruptive technologies.
• Low Expense Ratio: Compared to comparable ETFs in the same space.

Financial Performance:

FMET has returned 13.5% since its inception on December 22, 2022, outperforming the S&P 500's +8.2% return during the same period.

Growth Trajectory:

The metaverse market is projected to have a compound annual growth rate (CAGR) of 43.3% between 2023 and 2030, indicating substantial growth potential.

Liquidity:

• Average Daily Trading Volume: 1 million shares (as of October 26, 2023).
• Bid-Ask Spread: 0.07% (as of October 26, 2023).

Market Dynamics:

Factors influencing the metaverse market include:

• Technological advancements: Ongoing development of VR/AR, blockchain, and AI.
• Investor sentiment: Growing interest in the metaverse's potential.
• Regulation: Uncertainties around regulatory frameworks for the metaverse could impact its growth.

Competitors:

• Roundhill Ball Metaverse ETF (META): 2.4% market share.
• ProShares Metaverse ETF (VERS): 17.5% market share.

Expense Ratio:

FMET has an expense ratio of 0.75%.

Investment Approach and Strategy:

• Strategy: Actively managed, multi-factor approach.
• Composition: Invests in companies across various industries involved in the metaverse, including technology, gaming, retail, and social media.

Key Points:

• Actively managed thematic ETF focusing on the metaverse.
• Aims for long-term capital appreciation.
• Experienced management team with strong thematic expertise.
• Competitive expense ratio.
• Targeting a high-growth market with significant potential

Risks:

• Volatility: The metaverse is a nascent industry with potential for high volatility.
• Market Risk: The ETF's performance is tied to the performance of individual companies involved in the metaverse.
• Cybersecurity threats: Companies in the metaverse may be vulnerable to cyberattacks.

Who Should Consider Investing:

• Investors seeking diversification into disruptive technologies.
• Investors with a long-term investment horizon.
• Investors comfortable with moderate risk.

Fundamental Rating Based on AI: 7/10

Strengths:

• Experienced management team.
• Active management strategy aligns with the dynamic metaverse landscape.
• Focus on high-growth potential sectors.
• Attractive expense ratio.

Weaknesses:

• Limited track record due to recent launch.
• Exposure to nascent and volatile industry.
• Regulatory uncertainty surrounding the metaverse.

Neutral:

• Average daily trading volume.
• Bid-ask spread within industry norms.

Overall: With its experienced management team, active approach, and focus on high-growth potential, FMET presents a compelling option for investors seeking exposure to the metaverse. However, its limited track record and the inherent risks associated with the nascent industry remain considerations for potential investors.

Resources and Disclaimers:

• Fidelity Investments: https://am.fidelity.com/etf/emea/etf/overview/40207E0A1U
• Bloomberg: https://www.bloomberg.com/quote/FMET:US
• ETF.com: https://www.etf.com/etfanalytics/overview/summary/FMET

Disclaimer: Information provided for educational purposes only. This information is not financial advice, and investment decisions should be made with the assistance of a professional financial advisor.