so last year black rock created a metaverse ETF just kind of out of nowhere I think they probably saw the huge popularity of artificial intelligence and all the rising investments into those areas including the metaverse 2 and because they're already the world's largest asset management company and the second largest issuer of ETFs with their ey shares ETF division well it just makes perfect sense that they would also want to have an ETF for the metaverse as well but you know as popular and as really a Medi iic of a rise that AI has seen this year it's kind of overshadowed the metaverse a bit and I feel like it's being talked about a bit less than it used to be the the metaverse I'm I'm referring to of course in fact even with many AI stocks soaring this year this particular ETF is actually flat in performance but hey that may actually present a good buying opportunity for the long term right given that companies seem to still think that the metaverse will play play this really major role in the future of technology in fact analysts at McKenzie think that the market for the metaverse will be worth trillions of dollars over the next decade with already hundreds of billions of dollars of investment being poured into these new technologies by many companies all around the world now as for me I actually had several viewers ask me to give my opinion on this ETF throughout last year and I just never really got around to making that video for you guys so I do apologize for that to to be honest with you I just didn't really think that it would be a very popular video to make but uh you know given that the ETF is having a weak year here in 2024 I'm actually thinking that this might be a more pivotal moment for the ETF and that might be something that's worth discussing you know like are investors dismissing what could be a great investment opportunity here for the long term or is this more of another just kind of mediocre ETF that may perform well over time but isn't all that necessary to really be buying as investors and maybe just kind of picking some of the best Holdings from the ETF might be a better strategy what's the right answer here in ter in terms of those questions well I'll dive into all of this I'll give you my overall opinion on this ETF we'll talk about some of its characteristics how the ETF is structured we'll take a look at its various Holdings and I'll give my opinion on some of them we'll do it kind of Rapid Fire style and of course as always I'll let you know if I plan to buy this ETF myself too cuz by the way you guys know that I'm not the biggest fan of ETFs myself but this one would actually be the type of ETF that I actually do think is worth investing in because it gives you specific exposure to a certain area rather than just tracking like the broader Market as a whole which I'm not a fan of myself uh that's I I would say less necessary less exciting but you know something like this giving BR giving a diversified exposure to a specific area in this case the metaverse I actually do think that makes it much more interesting because of that so uh let's go ahead and take a look at all of this and let's see what we find here so uh first of all as this article from Seeking Alpha points out Black Rock launched the ETF back in early last year was called the ishares future metaverse Tech and Communications ETF the ticker symbol is ivrs I usually just say Iris but uh anyway they Market this as offering exposure to companies both in and outside of the United States that provide both the hardware and the software used for and with within the metaverse which allows consumers to immerse themselves in a virtual world that's interconnected through digital platforms social media gaming 3D software and both augmented and virtual reality now hopping over to the Black Rock website we can see that it carries an expense ratio of less than half a percent which I actually do think is pretty good especially for what this ETF is doing and compared to its peers now I only know of a few other metaverse ETFs that I'm a little familiar with but for example there's like the MeTV ETF that's the roundhill ball metaverse ETF there's also vers uh the pro that's the prar metaverse ETF and there's fmet the Fidelity metaverse ETF well black Rock's iverse is not only cheaper than the median of all ETFs in terms of expense ratio but it's also cheaper than these other peers except for Fidelity Fidelity's metaverse ETF that one is slightly cheaper but uh it also looks like Ivers does pay a tiny little dividend of about 0.3% which it may not seem like that's even worth mentioning but the only reason that I do mention it is because well number one I wouldn't expect to even get a dividend at all for a growth oriented dividend um a growth oriented ETF like this I wouldn't expect to even get a dividend so it's just kind of that nice little added bonus but number two is that for as small as that little dividend is it actually does help cover much of that expense ratio so it's almost like there's no expense ratio because of that bonus little dividend so I would take it I would take that little dividend now um speaking about growth and value well that really is what this ETF is focused much more on is future growth rather than value and you can see that in the makeup of this ETF which it looks like this ETF uh happens to track the Morning Star Global metaverse and virtual interaction index which if we hop over to uh to that index well it says that the goal of it is to benefit from metaverse platforms enhance social media immersive gaming 3D rendering and simulation software wearable technology NVR and AR uh as well as digital assets and payments all of that sounds good to me by the way contrary to Common belief out there the metaverse isn't just about wearing a VR headset all day it's all of these different Giant Markets being combined virtually and all the opportunity that comes from that you know doing more business and sales and media and gaming and learning and advertising and being connected all these kinds of things um can be done much more virtually and they will be done much more virtually over time and by the way that's not something that I'm particularly excited about myself but that's just kind of the sad reality the world is becoming more digital and more virtual and that's just kind of the road that we're heading down and I only see that getting larger and I only see these other markets being integrated more heavily into that type of ecosystem of everything being digital and virtual stuff like that um so I only see growth opportunities for all of that type of stuff and I I think that's where the metaverse really brings in a lot of value how it can bring some growth and some new opportunities to already existing markets and I I think that's kind of the confusion that people have with the metaverse they just expected to be like putting on a VR headset oh that's dumb that's not something anybody's ever going to want to do that's not really the point of the metaverse at least for me I think of it more as just kind of like uh presenting a new kind of growth opportunity opening some new doors for already existing markets to become more digital more virtual and so all these different companies that interact with that type of stuff I I think they do have long-term opportunities for growth and stuff like that and so having an ETF that takes advantage of all those different companies and puts them all into a basket you know that could be something that's worth interesting we'll take a look at all those individual stocks in just a second but going back to the index here for for uh just a quick minute here uh around 61% of the index is in uh US stocks while about 39% is in international stocks which I do think is okay I personally go much heavier in US Stocks myself because I just genely trust them more I I feel like I would understand their businesses especially here Living in America might be a little biased because of that but uh I'm just not one to have a lot of exposure to International stocks so you know that being at around 40% or so for international stocks seems a bit High to me but I don't know maybe you know they're just kind of going for a Diversified approach so maybe that makes sense uh anyway when looking at the value uh value versus um well value and kind of size Matrix and looking at growth and stuff well it's circled in at mostly having large cap stocks that are focused much more on growth rather than value and we can see more of that if we dig a Little Deeper here the average market cap for these Holdings is over 62 billion which is a pretty large size in my opinion uh while over 30% of the Holdings are in giant cap uh 25% are in large cap 35% the biggest is in midcap I like that and then only 7% in small and 0% in micro which I do have a couple feelings about all of this now like I said I I do like the fact that the largest exposure here is to the midcap that's going to be a good balance there of size but also growth opportunities and then I I like the fact that it's so heavy on giant cap and large cap app so the majority is going to be in safer larger companies I think that's a good thing because those are going to be very large Diversified profitable companies in many cases and so that's going to lower the risk for this index and the ETF that tracks it so I can kind of see what Morning Star and black rock is doing here kind of lowering the risk of it uh the only thing that did kind of surprise me a little bit is that you know the metav verse is this new like technology of the future you would think maybe there'd be a little more exposure to small cap and even maybe even micro because there might be some really young companies with explosive growth opportunities for the very long term for the future but that doesn't seem to be the case of them focusing too much on that again I think that's fine because you could still get tons of exposure to the metaverse with larger companies that are also Diversified and they're not relying just on the metaverse so that way uh there's a lot less risk there because they can still be profitable through many other things that they do too so it's a bit of a balance there but I think it's overall okay now uh going back to the index really quick here well the average valuations are pretty high uh got a PE average PE of over 20 PB of over three PS of almost four and price of cash flow of almost eight um those overall are pretty high levels but you have to figure that these are growth oriented companies so if you want value here we you really looking at the wrong ETF what we really want here is to you know we're going to pay a little bit of a premium premium for something like this in terms of valuation wise but the hope is that many of these companies could actually become very profitable over the longer term because this is the metaverse there's going to be a lot of software in here this is going to be a lot of software oriented companies and so when you have that you could end up with big software like margins once the metaverse really takes off in the future so the ETF may seem expensive right now in terms of valuations of these Holdings many of these stocks but over over the long term they could easily grow into those valuations again if the metaverse really takes off and these are the right companies to benefit from that and from all those software like margins if they can really start raking in huge profits over the longer term now before we look into all of those individual Holdings though well let's just take a quick glance at the etf's performance since its Inception and we can see that since the start of last year it's actually performed very well having already risen by over 30% however year to date is a bit of a different story with the ETF struggling this year to really gain any momentum and uh it's basically Fallen flat during that time here in 2024 which by the way compared to the broader Market it's completely underperformed with both the S&P and the NASDAQ climbing by double digit percentages each now uh does that leave a good buying opportunity though given given the weak performance this year and looking out into their long potential well we got to of course take a look at those individual Holdings and we got to see how I feel about their future potential and whether I agree with how the ETF is structuring all those different amounts and how much exposure they're giving to each stock so let's take a look at them so uh starting here we can see that there are 42 stocks in total with the top 10 making up just a bit over half of the entire portfolio the the entire index or the ETF uh those being meta in the top 10 meta is at number one at over 6% I do agree with that they've been spending probably the most amount of money just like purely on the metaverse alone and of course they also have billions of users on social media that can be targeted for that too and they're very profitable so I have no problem with meta being at the top then also at around 5% they have Crafton and number two I think they're Canadian I might be wrong but they're the gaming company that made pubg it's a really popular game I wouldn't put them at number two though I think that's way too high I'm not sure why that's so high uh there's also Roblox at number three I know why that's there cuz Roblox is a games platform where users can make other games too so it kind of fits perfectly with that metaverse theme but I would not put them that high myself they probably wouldn't even be in the top five for Me Maybe the top 10 but I'm not even sure about that they're kind of risky with a really expensive valuation and a lot of losses on the bottom line so I'm not the biggest fan of Roblox um and we have Sony at number four of course that's the company behind play PlayStation which also has the PlayStation VR so it does make sense for a lot of this but it would not be in the top five for me I would actually prefer Microsoft much more who has Xbox uh but then Autodesk is at number five they're pretty good they're a world leader in 3D design known for things like AutoCAD and and other stuff like that so that's a pretty good one then at number six we have Electronic Arts that makes sense huge gaming company behind Madden FIFA and more another gamer in uh take two at number seven and I actually own that one myself they make Grand Theft Auto and NBA 2K so a big gaming company then PTC at number eight I've actually never heard of them but apparently they're a modeling software company so I guess it makes sense uh then an at number nine that's a giant 3D design and Engineering uh simulations company so I do agree with that one there and then Unity at number 10 that's a giant games engine company it's kind of like the backbone of video games so I also agree with that one too Apple doesn't make the cut though it comes in at number 11 which is a little surprising to me cuz you know you think with how many smartphones they sell and even with the new augmented reality headset I know it's a very expensive one but you know they have their own augmented reality headset too so you know I would have thought that they would have been a little higher especially for also how profitable they are how safe this the stock probably is you know I I I thought it would have made the top 10 but it's just under that and actually even more surprising than that though is that my Microsoft didn't even make the top 10 that is insane to me cuz they have Xbox they spent like 70 billion to acquire Activision Blizzard clearly this ETF this index does care a lot about gaming I mean Microsoft is huge for gaming uh they own windows so basically every PC in the in the world like every computer in the world is is running on their on their platform uh and they also have Azure Cloud I mean a ton of the metaverse is probably going to run on Azure so that's crazy to me to not include Microsoft at in the top 10 especially for how profitable they are how safe the stock is all the other things they do so yeah that's crazy to me uh even Google too is not in the top 10 they have a big cloud platform they have Android basically uh it's like more popular than even iPhones like every you know the majority of phones um is actually on Android as opposed to iOS more so on Android so I would have had them in the top 10 too okay I'm not a big fan of this top 10 list but let's see what else mix up this ETF we'll go through it in kind in just very fast rapid fire style so uh I'm going to change the website though it's almost the same rankings but it's just going to be a little easier to go through the list so scrolling down to Apple right after that is Garmin at number 12 they're big uh wearables and GPS company but I wouldn't have them anywhere near this High I think that's a very hard Market to compete in um there's also a few Chinese gaming companies but my favorite is by far 10 cents they're the giant Behind fortnite These are Asian companies but uh 10 cent you know they have fortnite they used to be one of the they used to generate like the big biggest uh gaming revenues that's probably been overtaken by Microsoft recently after they acquired Activision but uh they they're huge in gaming but they also do a ton of stuff in AI they do a ton of stuff in cloud computing so I agree with tenson being high up maybe it could even be higher but anyway Ubisoft uh I believe that's a French gaming company I'm not a big fan of them though and then finally all the way down to number 21 they finally include Microsoft at less than 3% exposure uh they should be so much higher than that I would probably put them like in my top five or top three maybe even at number one Microsoft might even be number one for me uh Zoom video at number 22 that makes sense for business work and education Nvidia right under them at 23 I would put them way higher than that they'd be like in my top 10 for powering the metaverse with their gpus and even for their work in augmented reality and what they call the Omniverse uh they should be way higher in my opinion and then Google is right under them at only less than 1 and a half% that's criminal I would for sure put them in my top 10 too uh then we have Samsung big smartphone maker uh Adobe huge for Content creation I like them but they only have less than half a percent for that one and then all the all the rest of these here are actually less than half a percent too with some more chip stocks like AMD Qualcomm Micron Intel SK hux these are getting very tiny in terms of exposure though we have Nintendo one of my all-time favorite gaming companies but they're all the way down to just 0.08% exposure and then we have match group at only 0.02% I actually like them for online dating which could also be really big in the future for the metaverse and I believe they are I believe they own um Tinder and hinge and a few other very popular dating apps so that would be one that would should probably be higher uh and then man how the mighty have fallen Snapchat all the way at the very bottom there kind of a disaster of a company that there that just can't really compete anymore with the big dogs like Instagram and Tik Tok and stuff like that so yeah overall I would say that I am not the biggest fan of this list it's not that it's a bad list but I just don't agree with the overall structure of it like having companies like Microsoft Google Nvidia so incredibly low just doesn't make any sense to me I would move those right up to the top I would make some huge balancing changes I would take a bunch of the riskier ones that they have at the top I'd put those at the bottom i' take a lot of the safer ones move them higher um yeah I would make some huge changes to this and that really brings me to what has always been my biggest issue with ETFs like I always get a you know comments from viewers telling me that I should invest in ETFs because I can get so much you know broad exposure to certain areas and stuff but the problem is that I just when I look into them a lot of times I just don't agree with how they're structured and even in this particular case you know I think it's great for giving exposure to the metaverse I agree with a lot of the stocks that they have on the list but I don't agree with the structure of it I think they made some really weird choices and and when I look through the list too I actually own some of the the best ones like the ones that I like the most for the metaverse on this list I actually own most of them so I'd rather just pick the ones that I like the most and leave out the other stuff that I feel is kind of not necessary so yeah that that's kind of how I feel about ETFs like when I look at ETFs a lot of times I'm just like man I could just like yeah I like this one I like this I I like all these stocks I'd rather just pick those stocks and invest in the best ones is messing the ones that I like the most and then the other ones you know if I don't like them that much I don't really want them so I don't know you know you guys will have to tell me how you feel about this that's just my opinion you know we can all have our different views and opinions again I'm not trying to bag on ETFs I think that they are great for their specific purpose and if they're used for for your specific goals they can be great for that and you want like passive investing you want to invest in something specific area and you don't want to have to worry about it too much you don't want to have to keep track of everything just kind of let let you know a big company like Black Rock manage it all for you I think that's great I think it's totally fine um but for me it's just not something I'm into I I like picking all my individual stocks so uh that yeah that's how I feel about this one but let me know what you all think do you like this ETF are you thinking about buying this ETF or do you like just a bunch of the stocks from it and you'd rather just kind of handpick those yourself for the long term I love to hear your thoughts leave them down below everyone uh I hope you're all doing well thanks again for stopping by my friends and and uh I will catch you in the next video all right take care everybody bye-bye [Music]