Franklin Templeton launches metaverse ETF based on Solactive innovation index

    07 Sep 2022

    Franklin Templeton joined the metaverse with a new thematic ETF. The global investment firm has launched The Franklin Metaverse UCITS ETF that tracks the Solactive Global Metaverse Innovation Net Total Return Index. The new ETF will list on the Deutsche Börse Xetra (XETRA) on Sept. 7, and the Borsa Italiana and London Stock Exchange (LSE) on Sept. 9.

    Franklin Templeton announced on September 6 the launch of its new metaverse ETF – The Franklin Metaverse UCITS ETF, a metaverse and blockchain-focused exchange-traded fund.

    The new ETF will track the Solactive Global Metaverse Innovation Net Total Return Index, which is comprised of companies with significant exposure to the burgeoning metaverse and blockchain industries.

    The company described the metaverse as a “forward-looking shared virtual and mixed reality, powered by digital technologies.”

    Franklin Templeton is following in the footsteps of other leading investment companies that have launched metaverse-themed ETFs. Proshares, First Trust, Fidelity, Global X, and ETC Europe have all announced metaverse ETFs this year.

    According to Mckinsey, the burgeoning industry is expected to reach $5 trillion in market value by the year 2030, while Citi predicted a valuation of $13 trillion.

    While leading technology companies are willing to pounce on the metaverse by launching products tailored for the growth of the industry, asset investment companies like Franklin Templeton, Proshares, and First Trust think exchange-traded funds could be the key to onboarding mainstream investors into the market.

    Exchange-traded funds (ETFs) allow investors to invest in high-risk, high-reward sectors through investment pools composed of companies that target different segments of the market. This allows them to lower the risk of investing in relatively new sectors.

    “Society has already experienced three foundational changes in the way that technology operates and how it’s been delivered since the early 1970s. This exciting fourth wave is now emerging, enabled by blockchain technology,” Dina Ting, Head of Global Index Portfolio Management, Franklin Templeton commented on the new ETF.

    She also noted how quickly big tech companies have embraced the metaverse. Ting added that the expected growth of the e-commerce market to $2-$2.6 trillion by the year 2030 presents a great opportunity for the metaverse to grow.

    The Solactive Global Metaverse Innovation Index is a representation of companies that have or are expected to have significant exposure to the provision of products and/or services that contribute to the metaverse industry including blockchain applications. Eligible constituents belong to the following segments: Metaverse Technology, Platforms, and Devices, Interchange Standards, Data processing, Blockchain Technology, and Digital Asset Platforms.

    The companies are selected by Solactive’s proprietary Natural Language Processing Engine ARTIS®. ARTIS® utilizes advanced algorithms to parse large volumes of public documents evaluating companies’ relevance to several themes or topics. The procedure ranks potential index constituents according to proprietary criteria, considering not only a company’s exposure to a theme but also the company’s importance to it. Companies that are deemed to not align with UN Global Compact Principles are excluded from the index.

    According to the announcement the new ETF will list on the Deutsche Börse Xetra (XETRA) on 7 September, and the Borsa Italiana and London Stock Exchange (LSE) on 9 September.

    It will be registered in 10 countries including the UK, Austria, Denmark, Finland, France, Germany, Ireland, Italy, Spain, and Sweden, and will be managed by Dina Ting Head of Global Index Portfolio Management, and Lorenzo Crosato, ETF Portfolio Manager at Franklin Templeton the company said.

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