An index-tracking ETF that provides exposure to
companies that comprise the metaverse industry
First Trust Advisors L.P. (“First Trust”), a leading
exchange-traded fund (“ETF”) provider and asset manager, announced
today that it has launched a new ETF, the First Trust Indxx
Metaverse ETF (Nasdaq: ARVR) (the “fund”). The fund seeks
investment results that correspond generally to the price and yield
(before the fund’s fees and expenses) of an index called the Indxx
Metaverse Index (the “index”) which is designed to track the
performance of companies that are involved in offering technologies
that assist in creating the Metaverse.
"Metaverse" describes the next generation of the Internet, which
has the potential to allow creators to build the next chapter of
human interaction through immersive experiences in
three-dimensional virtual spaces. “Although the Metaverse is still
in its early stages, we believe this ecosystem offers tremendous
opportunity for innovation, including many applications that we
don’t fully appreciate today,” said Ryan Issakainen, CFA, Senior
Vice President and ETF Strategist at First Trust. “As a leading
provider of thematic ETFs, we are excited to offer ARVR as a way to
gain exposure to stocks that may benefit from the growth and
maturity of this dynamic investment theme,” Issakainen said.
Indxx defines the Metaverse as being comprised of the following
sub-themes: Internet protocol & contents; platforms; payment;
optics & display; and semiconductors, hardware, and 5G.
“Technological innovation deployed in the construction of the
ongoing initiatives to build a metaverse is laying the foundation
for a new digital frontier. In this regard, bold new ventures are
leaning into the future to create a more dynamic and exciting era
of opportunity in the digital space. These areas in particular are
ripe for investor exposure, especially due to their potential
application in a variety of industries,” said Rahul Sen Sharma,
Managing Partner at Indxx. “We are thrilled to collaborate with the
First Trust team throughout the licensing process to bring this
methodology to life.”
Chandan Kumar G V, Manager, Index Products at Indxx added, “Each
of our products represents a valuable opportunity that is backed by
top-notch research and a robust methodology that exemplifies an
innovative sector. The Indxx Metaverse Index is a testament to
this, and we are excited to bring this index to life through our
relationship with First Trust.”
For more information about First Trust, please contact Ryan
Issakainen at (630) 765-8689 or RIssakainen@FTAdvisors.com.
About First Trust
First Trust is a federally registered investment advisor and
serves as the fund’s investment advisor. First Trust and its
affiliate First Trust Portfolios L.P. (“FTP”), a FINRA registered
broker-dealer, are privately held companies that provide a variety
of investment services. First Trust has collective assets under
management or supervision of approximately $216 billion as of March
31, 2022 through unit investment trusts, exchange-traded funds,
closed-end funds, mutual funds and separate managed accounts. First
Trust is the supervisor of the First Trust unit investment trusts,
while FTP is the sponsor. FTP is also a distributor of mutual fund
shares and exchange-traded fund creation units. First Trust and FTP
are based in Wheaton, Illinois. For more information, visit
http://www.ftportfolios.com.
You should consider the fund’s investment objectives, risks,
and charges and expenses carefully before investing. Contact First
Trust Portfolios L.P. at 1-800-621-1675 or visit
www.ftportfolios.com to obtain a prospectus or summary prospectus
which contains this and other information about the fund. The
prospectus or summary prospectus should be read carefully before
investing.
Risk Considerations
A fund’s return may not match the return of its underlying
index. A fund invests in securities included in the index
regardless of investment merit and the securities held by a fund
will generally not be bought or sold in response to market
fluctuations.
Investors buying or selling fund shares on the secondary market
may incur customary brokerage commissions. Market prices may differ
to some degree from the net asset value of the shares. Investors
who sell fund shares may receive less than the share's net asset
value. Shares may be sold throughout the day on the exchange
through any brokerage account. Unlike mutual funds, shares of the
fund may only be redeemed directly from a fund by authorized
participants in very large creation/redemption units. If a fund’s
authorized participants are unable to proceed with
creation/redemption orders and no other authorized participant is
able to step forward to create or redeem, fund shares may trade at
a discount to a fund’s net asset value and possibly face
delisting.
A fund’s shares will change in value, and you could lose money
by investing in a fund. One of the principal risks of investing in
a fund is market risk. Market risk is the risk that a particular
stock owned by a fund, fund shares or stocks in general may fall in
value. There can be no assurance that a fund’s investment objective
will be achieved. In February 2022, Russia invaded Ukraine which
has caused and could continue to cause significant market
disruptions and volatility within the markets in Russia, Europe,
and the United States. The hostilities and sanctions resulting from
those hostilities could have a significant impact on certain fund
investments as well as fund performance. The COVID-19 global
pandemic has caused and may continue to cause significant
volatility and declines in global financial markets. While the U.S.
has resumed "reasonably" normal business activity, many countries
continue to impose lockdown measures. Additionally, there is no
guarantee that vaccines will be effective against emerging variants
of the disease.
An index fund will be concentrated in an industry or a group of
industries to the extent that the index is so concentrated. A fund
with significant exposure to a single asset class, or the
securities of issuers within the same country, state, region,
industry, or sector may have its value more affected by an adverse
economic, business or political development than a broadly
diversified fund.
Changes in currency exchange rates and the relative value of
non-US currencies may affect the value of a fund’s investments and
the value of a fund’s shares.
A fund is susceptible to operational risks through breaches in
cyber security. Such events could cause a fund to incur regulatory
penalties, reputational damage, additional compliance costs
associated with corrective measures and/or financial loss.
Depositary receipts may be less liquid than the underlying
shares in their primary trading market and distributions may be
subject to a fee. Holders may have limited voting rights, and
investment restrictions in certain countries may adversely impact
their value.
A fund may be a constituent of one or more indices or models
which could greatly affect a fund’s trading activity, size and
volatility.
There is no assurance that the index provider or its agents will
compile or maintain the index accurately. Losses or costs
associated with any index provider errors generally will be borne
by a fund and its shareholders.
Information technology companies and communication services
companies are subject to certain risks, which may include rapidly
changing technologies, short product life cycles, fierce
competition, aggressive pricing and reduced profit margins, loss of
patent, copyright and trademark protections, cyclical market
patterns, evolving industry standards and regulation and frequent
new product introductions. Communications services companies are
particularly vulnerable to domestic and international government
regulation, rely heavily on intellectual property rights, and may
be adversely affected by the loss or impairment of those
rights.
Large capitalization companies may grow at a slower rate than
the overall market.
Large inflows and outflows may impact a new fund’s market
exposure for limited periods of time.
Metaverse is a new and developing technology, the consequences
of which have not been fully explored. The risks associated with
the Metaverse may not emerge until the technology is widely used.
The risks may include, but not be limited to, small or limited
markets for their securities, changes in business cycles, world
economic growth, technological progress, rapid obsolescence, fierce
competition, loss of patent, copyright, trademark and trade secret
protection and government regulation. Metaverse companies,
especially smaller, start-up companies, tend to be more volatile
than securities of companies that do not rely heavily on
technology. There is no guarantee that the products or services
produced by companies in Metaverse-related businesses will be
successful.
A fund classified as “non-diversified” may invest a relatively
high percentage of its assets in a limited number of issuers. As a
result, a fund may be more susceptible to a single adverse economic
or regulatory occurrence affecting one or more of these issuers,
experience increased volatility and be highly concentrated in
certain issuers.
Securities of non-U.S. issuers are subject to additional risks,
including currency fluctuations, political risks, withholding, lack
of liquidity, lack of adequate financial information, and exchange
control restrictions impacting non-U.S. issuers. Investments in
emerging markets securities issued by governments in emerging
countries and by companies located in, or having significant
operations in emerging countries are generally considered
speculative and involve additional risks relating to political,
economic and regulatory conditions. In China, direct ownership of
companies in certain sectors by foreign individuals and entities is
prohibited. In order to allow for foreign investment in these
businesses, many Chinese companies have created VIE structures to
enable indirect foreign ownership. This arrangement allows U.S.
investors, such as the fund, to obtain economic exposure to the
Chinese issuer or operating company through contractual means
rather than through formal equity ownership. Although VIEs are a
longstanding industry practice and well known to officials and
regulators in China, VIEs are not formally recognized under Chinese
law. Intervention by the Chinese government with respect to VIEs
could significantly affect the Chinese company’s performance and
the enforceability of the VIE’s contractual arrangements that
establish the links between the Chinese company and the shell
company in which the fund invests.
A fund and a fund's advisor may seek to reduce various
operational risks through controls and procedures, but it is not
possible to completely protect against such risks. The fund also
relies on third parties for a range of services, including custody,
and any delay or failure related to those services may affect the
fund’s ability to meet its objective.
Trading on the exchange may be halted due to market conditions
or other reasons. There can be no assurance that the requirements
to maintain the listing of a fund on the exchange will continue to
be met or be unchanged.
First Trust Advisors L.P. is the adviser to the fund. First
Trust Advisors L.P. is an affiliate of First Trust Portfolios L.P.,
the fund’s distributor.
The information presented is not intended to constitute an
investment recommendation for, or advice to, any specific person.
By providing this information, First Trust is not undertaking to
give advice in any fiduciary capacity within the meaning of ERISA,
the Internal Revenue Code or any other regulatory framework.
Financial professionals are responsible for evaluating investment
risks independently and for exercising independent judgment in
determining whether investments are appropriate for their
clients.
Indxx and Indxx Metaverse Index (“Index”) are trademarks of
Indxx, LLC (“Indxx”) and have been licensed for use for certain
purposes by First Trust. The Fund is not sponsored, endorsed, sold
or promoted by Indxx and Indxx makes no representation regarding
the advisability of trading in such product. The Index is
determined, composed and calculated by Indxx without regard to
First Trust or the Fund.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220420005657/en/
Ryan Issakainen First Trust (630) 765-8689
RIssakainen@FTAdvisors.com
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