Fidelity Investments Targets Investors with Web3 ETFs

Key Insights:

• Fidelity Investments targets a younger client base with web3 ETFs.
• This month, Fidelity launched a digital asset and a Metaverse ETF.
• U.S. banks have been bullish about the Metaverse for some time, with JPMorgan buying land in the Metaverse.

As more mainstream players enter the NFT space and the Metaverse, investors will be looking for both active and passive investment opportunities.

Such is the hype that JPMorgan and Citi have delivered impressive projections for the web3 economy.

Last month, Citi jumped on the web3 bandwagon, projecting a $13 trillion Metaverse by 2030. Citi’s projection followed a more conservative JPMorgan projection in February.

JPMorgan projected the Metaverse to deliver over $1 trillion in Metaverse-related yearly revenues. In February, JPMorgan put its money where its mouth is, buying land in Decentraland (MANA).

It, therefore, comes as little surprise that leading investment shops are starting to offer web3 investment products.

Fidelity Investment Launches Web3 ETFs to Widen the Client Base

This week, Fidelity Investments launched the Fidelity Crypto Industry and Digital Payments ETF (FDIG) and the Fidelity Metaverse ETF (FMET).

Fidelity launched FMET on April 19, 2022. According to the Fund objective,

“The fund seeks to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity Metaverse Index.

The Fidelity Metaverse Index is designed to reflect the performance of a global universe of companies that develop, manufacture, distribute, or sell products or services related to establishing and enabling the Metaverse.”

Fidelity launched FDIG on April 21, 2022. According to the Fund objective,

“The Fund seeks to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity Crypto Industry and Digital Payments Index.

The Fidelity Crypto Industry and Digital Payments Index is designed to reflect the performance of a global universe of companies engaged in the activities related to cryptocurrency, related to blockchain technology, and digital payments processing.”

For investors looking for low fee investment opportunities, the two ETFs have a net expense ratio of 0.39.

As of June 2021, Fidelity Investments had US$4.2tn in assets under management.

Fidelity Investment Follows in the Footsteps of ProShares

ProShares is an issuer of exchange-traded funds with a 2021 Assets Under Management of US$65bn.

The ProShares Vers ETF launched on March 15, 2022, and “seeks investment results, before fees and expenses, that track the performance of the Solactive Metaverse Theme Index.”

“The Solactive Metaverse Theme Index is designed to track the performance 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, as determined by the index methodology.”

Compared with the Fidelity ETFs, the ProShares Vers ETF has an expense ratio of 0.58.

With only a handful of big names already in the space, more ETFs will launch. Mutual funds will likely follow.