On Oct. 13, four of South Korea’s major asset management companies — KB, Samsung, Mirae Asset and NH-Amundi — debuted their metaverse-themed ETFs (exchange-traded funds). On average, the four funds achieved profits over 27% in a month after being listed on the Korea Exchange.
The four metaverse ETFs invest in various technology firms that develop the basis for constructing metaverse platforms, such as in cloud computing and virtual reality (VR) technology. But in their first month after being listed, more significant profit came from firms in the gaming and entertainment industry that are beneficiaries of the metaverse future.
In Mirae Asset’s TIGER Fn Metaverse ETF, HYBE, JYP Entertainment and YG Entertainment took up close to 30% of total profit from the fund. They are three of the biggest players in the K-pop industry, recently announcing projects with the metaverse or with NFTs (non-fungible tokens), which are expected to play an integral role in the metaverse.
HYBE, global K-pop group BTS’s music agency, partnered with Dunamu, owner of cryptocurrency exchange Upbit, for an NFT venture. YG Entertainment also joined the partnership. Mirae Asset’s fund in WYSIWYG Studios, a visual effects and video technology company, also presented 10.11% profit for investors.
Each exchange-traded fund included at least a few South Korean game developers, such as Pearl Abyss, Wemade and Netmarble, who also brought considerable return. NH Investment & Securities recently gave Pearl Abyss a positive appraisal. It said the video game maker’s soon-to-be released DokeV will see the birth of a video game that is plugged to both NFTs and the metaverse.
Internet giant Naver, which already has launched Zepeto metaverse in 2018, and Kakao, which is preparing to launch a metaverse, were also in the list of portfolios under the metaverse ETFs.
Mirae Asset announced today that its TIGER Fn Metaverse ETF’s net asset value (NAV) broke the 200 billion Korean won (about US$169 million) mark in just one month after being listed on the Korea Exchange.
One sales representative from Mirae Asset explained to Forkast.News why metaverse ETFs are in high demand. “A big appeal to the investors is that everyone is talking about the metaverse, but they don’t have time to study it. It is such an easy way to form a portfolio around a hot new industry with less risk than investing in individual companies,” said the official.
Indeed, the metaverse is touted as one of the most talked-about key topics of 2021 in South Korea. The country’s Ministry of Economy and Finance declared the metaverse as one of the key future industries, along with blockchain, intelligent robots, cloud computing technology and digital healthcare.
Despite the popularity of the term and its byproduct ETFs, the metaverse itself in South Korea still appears to have a long way to go. “People would not want to live in a metaverse where there’s a limited interoperability between one metaverse to another,” said Park Hye-jin, vice head professor of Venture Capital MBA at aSSIST, in an interview with Forkast.News.
Park says constructing a seamless, desirable metaverse experience will require the metaverse to be built on decentralized blockchain technology, but also that different companies need to develop their technologies to a similar level. Some of the areas that need more improvement are hardware, computing power and network stability.