AI wealth manager FinaMaze opens the metaverse to UAE investors

The portfolio offers retail investors exposure to companies operating in the metaverse

The FinaMaze metaverse portfolio will bundle together stocks of companies operating in the metaverse. Photo: AFP

FinaMaze, a hybrid asset manager regulated by The Abu Dhabi Global Market, will open an investment portfolio on Tuesday that will offer investors with a net worth of more than $500,000 exposure to companies operating in the metaverse.

The metaverse portfolio, which requires a minimum investment of $2,000, will include stocks of technology companies, video game publishers, software developers, entertainment companies and infrastructure and hardware manufacturers with a presence in the metaverse, FinaMaze said on Monday. It will also offer controlled exposure to a cryptocurrency exchange and Ethereum.

“The metaverse, the virtual world, is already a reality,” said Mehdi Fichtali, chief executive and founder of FinaMaze, which offers investment advice through a combination of human experience and machine learning outcomes.

“Major companies such as JP Morgan, Walmart, Verizon and Adidas are setting foot in the metaverse in one way or another. But the adoption will not be a straight line or happen overnight. Nor will the stock market performance journey.”

The metaverse is a digital space that allows users to communicate and move virtually in their three-dimensional avatars or digital representations. It gained significant attention when Facebook rebranded itself as Meta Platforms last October.

The global market size of the metaverse was estimated at $47.69 billion in 2020 and is expected to hit almost $830bn in 2028 at a compound annual rate of 43.3 per cent, according to Vancouver-based Emergen Research.

Mark Zuckerberg's Meta plans to spend $10bn this year on Reality Labs – its metaverse division. Technology giant Microsoft aims to allow avatars to share PowerPoint presentations and Excel files in Teams – an app that offers workspace chat, videoconferencing and file storage – next year.

Software maker Unity is developing a concept called “digital twins”, a virtual copy of the real world. Graphics chip maker Nvidia is developing a technology called Omniverse that will link 3D virtual worlds in the metaverse. Tencent Holdings, the world's largest gaming company by revenue, is reported to be developing an advanced gaming studio to focus on the metaverse.

FinaMaze’s metaverse portfolio will diversify across more than a dozen securities, spreading the risk among different sectors and automatically rebalancing the allocation to remain in line with each investor’s risk profile, the company said.

The wealth manager launched the metaverse portfolio because not all investors have the time and expertise to conduct research on each market theme and build a selection of securities to translate the exposure they desire.

“They neither want to be glued to their smartphone, constantly checking their portfolio. Only metaverse-related securities that have already been corrected by the market have been added to the smartfolio to ensure an entry point appreciably below recent all-time highs,” Mr Fichtali said.

The product also includes a “metaverse vs market” version that delivers a relative performance of metaverse-related securities over the market, FinaMaze said. This protects the metaverse portfolio from a potential sharp decline in the markets.

If metaverse securities fall but in proportions less than the market, the “metaverse vs market” feature will then deliver the favourable difference to investors, Mr Fichtali said.

FinaMaze started offering prime retail investors access to its algorithm-powered portfolios across a range of asset classes in November. It defines prime retail investors as those who invest a minimum of $2,000. Previously, only professional investors had access to the wealth manager’s investment products.

Robo-advisers have become popular in the wealth management sector because algorithms can crunch large and intricate data sets across different parameters faster, more precisely and at greater volumes than most people.

They also reach an underserved market of middle-class investors unable to obtain access to portfolio management services because of minimum investment requirements.