Metaverse investment enters mainstream as CSOP’s exchange-traded fund debuts in Hong Kong to pick winners in next-generation web
CSOP Asset Management‘s Metaverse Concept ETF will begin trading in the Hong Kong stock market on Monday, becoming the first publicly traded portfolio to help investors pick winning stocks in the next generation of the web.
The exchange-traded fund (ETF)’s current portfolio comprises 46 US-listed technology stocks with US$5.2 trillion in combined capitalisation, including Apple, Facebook‘s parent Meta, WeChat‘s operator Tencent Holdings, the 3D graphics processor maker Nvidia and the online games platform Roblox.
Trading in Hong Kong under the mnemonic “3034,” the actively managed fund will list at HK$7.80 per unit, for a board lot of 100 units. The fund’s manager actively buys and sells stocks from the portfolio, instead of tracking its performance against a benchmark like passive ETFs, CSOP said.
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“As the technologies involved in the development of the metaverse are ever changing, an actively managed ETF is more suited to investing in the metaverse,” said CSOP’s director Kenneth Lee, during a Friday media briefing hosted on Roblox platform for virtual events and avatars, adding that the active ETF will undergo more frequent reviews than passive funds.
Chen Ding, Chief Executive Officer of CSOP Asset Management, during an interview in Central on October 22, 2020. Photo: Jonathan Wong alt=Chen Ding, Chief Executive Officer of CSOP Asset Management, during an interview in Central on October 22, 2020. Photo: Jonathan Wong>
The ETF will invest in US-listed stocks, including American depositary receipts (ADRs), that belong to four categories in the metaverse infrastructure: chip and telecoms network companies, engineering stocks such as display makers, application developers and content providers.
The ETF received US$9 million in investments from subscribers when it was opened last week to initial subscriptions.
The global metaverse market is likely to see an explosive growth over the next decade, ballooning to US$1.5 trillion in value by 2030, from US$5 million in 2020, CSOP said, citing data from Bloomberg and PwC.
South Korea has been Asia’s pioneer in metaverse investments, with eight such ETFs and US$1.1 billion in assets under management (AUM) listed on the Korea Exchange last year, according to Morningstar’s data.
Mirae Asset Global Investment and Samsung Asset Management are among the most active managers of metaverse-related ETFs, where growth has been driven by demand by retail investors. Hong Kong’s investors are unable to invest in the South Korean market, said Samsung Asset Management’s ETF management team head Jaewook Chung.
That leaves the Hong Kong market open for CSOP, one of the most active local ETF managers with 35 listed out of the city’s 150, to tap investors’ interest.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
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