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Introducing the Invesco Metaverse and AI Fund

Shape the future. Invest in undervalued companies that help facilitate, create, or benefit from immersive virtual worlds underpinned by developments in artificial intelligence (AI).

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Metaverse and AI making an impact

Technology plays an ever-growing role in our everyday lives. It has brought us significant economic growth and is driving what some have classed as the start of the ‘fourth’ industrial revolution. In our view, the Metaverse and artificial intelligence represent the next phase of this revolution – the next step in the evolution of the internet, a megatrend that we are only in the first innings of.

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Artificial Intelligence

AI can transform productivity of creators tasked filling real-time, 3D, persistent, large scale virtual worlds and environments.

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Computer hardware

Computer power demand means further development needed in components.

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Wireless broadband connectivity

Connectivity is essential as systems, apps and peripherals need to be able to communicate with each other seamlessly and wirelessly.

Why this fund?

Our aim is to find and invest in undervalued companies that help create, facilitate, or benefit from, immersive virtual worlds for both consumers and enterprises.

We want to capture the growth of the Metaverse and artificial intelligence (AI) by investing in 30-50 stocks with exposure to the theme. We take a disciplined approach to valuation, with a focus on cash flow, balance sheet strength and business model sustainability.

The fund is diversified across the different segments of the Metaverse and AI value chain. At this early stage, investment opportunities are greater in those companies developing the supportive technologies and infrastructure required to enable these capabilities. However, it isn’t just about investing in tech and internet companies. It’s also about things such as network infrastructure, digital payments, and content.

The investment team have broad experience in multiple sectors and a deep understanding of enabling technologies and requirements for building and operating the Metaverse and AI. They also cover multiple investment regions, which helps to bring a global approach to investing compared to their typically US-focused competitors. Access the Invesco Metaverse and AI Fund product page to view KIDs/KIIDs and factsheets. The investment concerns the acquisition of units in an actively managed fund and not in a given underlying asset.

Investment risks

  • For complete information on risks, refer to the legal documents. The value of investments and any income will fluctuate (this may partly be the result of exchange-rate fluctuations) and investors may not get back the full amount invested. The fund may invest in certain securities listed in China which can involve significant regulatory constraints that may affect the liquidity and/or the investment performance of the fund. The fund invests in a limited number of holdings and is less diversified. This may result in large fluctuations in the value of the fund. As this fund is invested in a particular sector, you should be prepared to accept greater fluctuations in the value of the fund than for a fund with a broader investment mandate.  As a portion of the fund may be exposed to less developed countries, you should be prepared to accept large fluctuations in the value of the Fund.
Find out more about the fund

Meet the team

The primary drivers of the fund’s positioning and performance are its named fund managers Tony Roberts and James McDermottroe. However, collaboration is a key element of our investment culture, and they can source ideas and market insights from a wider group of regional experts.

We believe the Metaverse and AI represent a major economic opportunity for a wide range of innovative companies that can help facilitate, create, or benefit from the growth of immersive virtual worlds.

FAQ

Artificial intelligence (AI), in its broadest sense, is intelligence exhibited by machines, particularly computer systems. It is a field of research in computer science that develops and studies methods and software that enable machines to perceive their environment and use learning and intelligence to take actions that maximize their chances of achieving defined goals. Such machines may be called AIs.

There are varying definitions of the Metaverse, which is not surprising given that it’s still in the early stage of its development. What people tend to agree on is that it’s going to involve the building of real-time, 3D, persistent, large scale virtual worlds and environments, where people are going to be able to work, play, learn, entertain, and enjoy real-life experiences. This is about bringing together all the elements of our digital age in an immersive experience, creating a seamless convergence of our digital and physical lives. Key words seem to be: immersive, interoperable, and social.

A more detailed explanation of how the investment team behind the fund see the Metaverse, can be found here.

 

The most direct way to invest in the Metaverse is through stocks of companies that are developing or utilizing AI and Metaverse-related technology.

Cryptocurrencies such as Bitcoin, Ethereum, and Decentraland's MANA token may have a role to play in the virtual economy aspect of the Metaverse, as potential forms of payment and/or investment vehicles within virtual worlds.

AI and the Metaverse have the potential to revolutionise the way we interact with the world and with each other. Imagine a future where physical distance is no longer a barrier to socialising, working, or learning. A world where immersive experiences and virtual economies provide endless opportunities for entertainment and economic growth. The Metaverse could even revolutionise healthcare by offering innovative and accessible treatments for mental and physical illnesses. It could expand our horizons and open possibilities that we can only dream of.

AI and the Metaverse face several challenges, such as:

  • Technological limitations: AI and the Metaverse require advanced technologies, such as high-speed internet, powerful computing, and sophisticated virtual reality hardware, to create an immersive and responsive virtual environment. Current technology still has limitations that need to be addressed.

  • Interoperability: The Metaverse must be able to seamlessly integrate different virtual environments, platforms, and devices to provide a seamless user experience. Currently, there are no industry-wide standards for interoperability, which can lead to fragmentation and hinder the development of a truly universal Metaverse.

  • User safety and privacy: AI and the Metaverse must ensure user safety, privacy, and security in a virtual environment, where harmful behaviour and content can be more difficult to regulate. The Metaverse must be equipped with the necessary safeguards and tools to prevent cyberbullying, harassment, and other forms of abuse.

  • Legal and financial regulation: The Metaverse’s virtual economy raises new legal and financial issues that need to be addressed. There must be regulations in place to protect users and prevent fraudulent activity.

  • Social and ethical concerns: AI and the Metaverse must also address social and ethical concerns, such as the potential impact on physical world interactions, privacy, and surveillance. It must promote diversity, equity, and inclusion to ensure that everyone can benefit from their potential.

The development of AI’s and the Metaverse will require collaboration and innovation across industries, government, and civil society to address these challenges. However, the potential benefits are significant, and it remains an exciting development that could transform the way we interact with each other and the world around us.

Important information

  • Investors should read the legal documents prior to investing. Data as at 31 August 2024, unless otherwise stated. By accepting this material, you consent to communicate with us in English, unless you inform us otherwise. This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. Any investment decision should take into account all the characteristics of the fund as described in the legal documents. For sustainability related aspects, please refer to https://www.invescomanagementcompany.lu.
    Views and opinions are based on current market conditions and are subject to change. For information on our funds and the relevant risks, refer to the Key Information Documents/Key Investor Information Documents (local languages) and Prospectus (English, French, German, Spanish, Italian), and the financial reports, available from www.invesco.eu. A summary of investor rights is available in English from www.invescomanagementcompany.lu. The management company may terminate marketing arrangements.
    Not all share classes of this fund may be available for public sale in all jurisdictions and not all share classes are the same nor do they necessarily suit every investor.

    EMEA3803515/2024