BlackRock focuses on patent innovation with new Metaverse

BlackRock has launched a metaverse thematic ETF in Europe which utilizes a relatively unexplored investment approach by leveraging patent data to identify market leaders, innovators, and specialists in the space.

BlackRock launches Metaverse thematic ETF in Europe

The metaverse refers to a future iteration of the internet comprising a perceived virtual universe.

The iShares Metaverse UCITS ETF (MTAV NA) has been listed on Euronext Amsterdam in US dollars.

The metaverse is a term used to describe the concept of a future iteration of the internet, made up of persistent, shared, 3D virtual spaces linked into a perceived virtual universe.

Combining aspects of social media, online gaming, augmented & virtual reality, e-commerce, and blockchain technology, the metaverse is expected to influence many aspects of people’s lives including how they interact, socialize, learn, shop, work, and play virtually.

While still in its infancy, the metaverse has already attracted billions of dollars of investment from large technology companies, private markets, and consumer brands, and new virtual applications for the metaverse are emerging on a daily basis. According to a McKinsey report, the metaverse could command a market value of $800 million by 2025 and generate annual revenues of as much as $5 trillion by 2030.

Omar Moufti, product strategist for thematic and sector ETFs at BlackRock, commented: “We see the metaverse as the next leap forward in global communication and connectivity. It has the potential to revolutionize many sectors and processes, and reshape every facet of society, from the way we work, consume, interact, and produce. As further uses for metaverse technologies become apparent, the desire for exposure to the technology companies behind these innovations grows. The iShares Metaverse UCITS ETF gives investors access to a diversified portfolio of companies active in building the metaverse and applying it in their fields.”


The ETF tracks the STOXX Global Metaverse Index which selects its constituents from a universe of developed and emerging market stocks with market capitalizations greater than €200m and average daily trading volumes above €1m.

Harnessing insights from Swiss business management consultancy EconSight, the eligible universe is screened for firms with at least ten patents related to the following metaverse technologies: 3D image modeling, avatars, blockchain, digital twin, graphic processing units, non-fungible tokens, virtual reality, and augmented reality.

The methodology then ranks the screened constituents by the number of ‘High-Quality Patents’ held by the firm. High-Quality Patents are defined as patents with a patent quality score that falls in the top 10% for the technology in question. Patent quality is a factor of citations (a measure of how competitors view the importance of a patent) and market coverage (how widely registered the patent is). Companies that fall in the top 10% of the ranked universe are selected for inclusion in the index.

Additionally, the index includes eligible companies with ‘Patent Specialization Scores’ (the proportion of metaverse-related patents held by a firm relative to its total number of patents) above 30%.

Index constituents are initially equally weighted and then adjusted to increase the weight of companies with higher Patent Specialization Scores. Any single stock is capped at 8% and the cumulative weight of stocks with weights above 4.5% is limited to 35%.

As of the end of November, the index contained 65 constituents. Over four-fifths (80.5%) of the total weight was allocated to US-listed stocks with the next-largest country exposures being Japan (8.1%), France (4.3%), and China (2.4%).

Stocks from the technology sector made up nearly half (46.3%) of the index’s sector allocation with notable exposure also to companies classified within the consumer products & services (29.2%) and industrial goods & services (10.7%) sectors.

Notable positions included Electronic Arts (8.2%), Activision Blizzard (8.2%), Autodesk (6.8%), Nvidia (6.0%), Nintendo (4.5%), Dassault Systèmes (4.2%), and Roblox (4.1%).

The ETF comes with an expense ratio of 0.50% and is classified as an Article 8 product under the European Union’s Sustainable Financial Disclosure Regulation (SFDR).

There are three existing ETFs available in Europe targeting the metaverse investment theme with the BlackRock fund being priced in between its competitors. The Franklin Metaverse UCITS ETF (METE LN) is the cheapest with an expense ratio of just 0.30%, while the Roundhill Ball Metaverse UCITS ETF (METV GY) and ETC Group Global Metaverse UCITS ETF (METR LN) cost 0.59% and 0.65%, respectively.