Are you over meme stocks? How about a few metaverse plays?
A metaverse is a virtual space where people can guide avatars and interact with other visitors and with the virtual environment.
A 36-year-old office worker in Seoul recently invested 5 million won ($4,410) in a metaverse-related fund. He was inspired by his elementary school daughter, who spends hours on Zepeto, Naver’s metaverse app, every day.
Zepeto is an app that lets people create their own avatars with a choice of clothing, hairstyles and makeup. In the virtual spaces, they can meet with other avatars, shop and play games. The number of users to the online avatar creation service exceeds 200 million so far, according to Naver.
“I decided to invest in the metaverse fund because I think the industry has great potential for growth,” he said.
The size of metaverse market, which was valued at 50 trillion won in 2019, will grow to 1,700 trillion won by 2030, according to global consulting firm PwC.
With more investors rushing to metaverse-related investments, brokerages are seeing won signs.
KB Asset Management was the first in the industry to come up with metaverse-related fund product. Its KB Global Metaverse Economy fund, which was introduced in mid-June, invests in hardware companies that make virtual reality (VR) and augmented reality (AR) devices like Apple and Facebook, and platform and content companies such as Roblox, Naver and HYBE.
“The metaverse fund allows people to easily invest in the metaverse market,” said Lee Hyun-seung, CEO of KB Asset Management.
Korean investors poured a total of 5.4 billion won into the fund in only about two weeks, according to the company.
Samsung Asset Management on June 28 introduced a Samsung Global Metaverse fund, which can follow eight different investment themes, including cloud computing, VR, mobility, online games, online payments and online platforms.
In Korea, there are a few companies that run metaverse platforms or develop related technologies. Naver, NCSoft, Wysiwyg Studios, Giantstep and LG Innotek are among them.
NCSoft runs Universe, a K-pop fan community. It allows users to dress the avatars of their favorite stars. Wysiwyg Studios and Giantstep own visual effects technologies that are essential in the metaverse, while LG Innotek produces components that are needed for AR features.
“As the market for AR glasses is on the rise in the era of the metaverse, LG Innotek’s camera and 3-D sensing modules will help increase the value of the company,” said Kim Ji-san, an analyst at Kiwoom Securities.
Entertainment companies like YG Entertainment and HYBE are also popular choices, mostly for K-pop fans who wish to meet their favorite idols and celebrities in the virtual space.
Shares of Kosdaq-listed Wysiwyg Studios, closed at 14,250 won on Thursday, a 131 percent rise compared to Jan. 4. Shares of HYBE jumped 91 percent while Naver 41 percent during the same period.
Some Korean investors have already moved to foreign stocks.
According to the Korea Securities Depository, Korean investors purchased roughly $81.15 million worth of Roblox shares in June as of Tuesday. This makes Roblox as the No. 1 foreign stock among Korean investors in terms of volume of net purchases in June. The San Mateo, California-based game company has been a pioneer in the metaverse, with one out of two American teens having a presence on Roblox’s metaverse game, according to the company.
Koreans bought a net $42.65 million worth of Facebook shares during the same period.
Samsung Asset Management said it is currently reviewing a fund product that only includes leading domestic companies involved in the metaverse. Mirae Asset Management is planning to introduce an ETF that invests in metaverse-related firms.
“As major consumers of the metaverse market are young people, brokerage houses will come up with some products that can target them,” said Lee Hyo-seob, a senior research fellow at Korea Capital Market Institute. “They may want to come up with a model that allows people to make investments in the virtual space in the future.”
BY HWANG EUI-YOUNG,SARAH CHEA [email@example.com]