OCBC RoboInvest launches Metaverse Portfolio – Is this a good investment? 



Ever since Facebook’s rebrand, the “Metaverse” is all the rage now.

And with Microsoft buying over Activision Blizzard in an active grab for some of the most coveted gaming IP, it looks like the Metaverse wars are just getting started.

The recent review we did on OCBC RoboInvest was quite well received by you guys, so when I heard they were launching a new Metaverse Portfolio, it really caught my eye.

How good is the OCBC RoboInvest Metaverse portfolio?

Worth investing in?


Note: This post was sponsored by OCBC. All views and opinions expressed in this post are from Financial Horse.

Basics: What is the Metaverse?

There’s no official definition of the Metaverse, but it’s been the hottest thing since sliced bread ever since Facebook rebranded to Meta.

If you’ve watched Ready Player One, you’ll understand what the Metaverse is.

Or for anyone who grew up in an MMORPG like World of Warcraft (like me), you’ll be innately familiar with the concept of a virtual world that exists in parallel with the real world.

Think World of Warcraft, 24/7, for the whole world, with an active thriving economy built around crypto. That you can access via your phone, laptop, game console, or virtual reality.

Don’t know about you, but it sure sounds amazing to me.

The Metaverse portfolio then, tries to invest in a bunch of technologies that will be needed to create the Metaverse.

Everything from semiconductors, cloud computing, gaming even crypto exchanges.

What is the OCBC RoboInvest Metaverse Portfolio?

I did a full review on OCBC RoboInvest recently, so do check it out here if you’re keen.

Long story short is that OCBC RoboInvest curates a whole bunch of thematic portfolios you can invest in – from Cybersecurity, US Banks, China growth to Electric Vehicles.

And the newest addition to this list – the Metaverse Portfolio.

How is the Metaverse Portfolio constructed?

Taken from the fact sheet:

The Metaverse Portfolio is constructed from stocks listed in the US that are directly or indirectly affiliated with the development of the Metaverse concept.

A proprietary Quality, Value and Momentum (QVM) methodology has been applied to ensure that only high quality stocks are included in the portfolio.

Stocks in the portfolio have been screened for various factors, including Return on Invested Capital (ROIC), Earnings per Share (EPS) Growth, Price-to-Sales multiples, etc.

The portfolio will be actively monitored and rebalanced quarterly to ensure that only top stocks ranked via the QVM Methodology are included in the portfolio.

It’s quite a bit of technical jargon, so let me just put it in plain English:

  • They pick US listed stocks that are connected in some way to the Metaverse
  • They look at Quality, Value and Momentum factors to decide what goes into the portfolio
  • They also screen for fundamental ratios like ROIC, EPS and Price to Sales
  • The portfolio is actively monitored and rebalanced on a quarterly basis

Yep, you read that right – this is an active portfolio, and OCBC RoboInvest makes rebalancing changes on a quarterly basis (if any).

The good thing though, is that a notification will be provided before rebalancing is done.

If you don’t like the rebalancing, you have the option to choose not to go ahead with it.

Fundamentally backward looking?

A potential problem with this kind of methodology is that it is fundamentally backward looking.

It’s essentially looking at historical performance of the stocks and trying to pick investments on that basis.

As opposed to a process that is more forward looking in nature by evaluating the business prospects and growth potential on a per stock basis.

To be fair, it’s hard to really critique this investment strategy. Most active managers have been running a similar methodology the past 10 years and achieving amazing results outperforming market benchmarks.

At the end of the day – results speak for themselves, no?

What goes into the Metaverse Portfolio?

As at 22 February 2022, these are the constitutions of the Metaverse Portfolio.


You can see the sector allocation above, the biggest being semiconductors which comes in at 30.3%, and Tech Hardware the next biggest at 13.1%.

This makes sense to me, because technology drives the world today.

Whereas the 20th century was powered by oil and all that fossil fuels made possible, the 21st century is powered by silicon.

In fact, my own portfolio has an outsized allocation to semiconductor names like AMD, NVIDIA and Micron.

It’s like the saying goes – in a gold rush, bet on the guy selling pickaxes. Whatever government or corporation wants to invest heavily in infrastructure in this decade, they’re going to have to buy semiconductors.

Curated by Lion Global

What is also interesting, is that Lion Global helps OCBC to curate the model portfolio.

OCBC then has the full discretion to accept, reject or tweak the portfolio based on their discretion.

I suppose this is both a good and a bad.

It’s good in the sense that you have an extra pair of eyes to go over the investment decisions, and potentially override Lion Global.

It’s bad in the sense that, well, the extra pair of eyes could be wrong.

But again, this is just the nature of how active investing works.

Historical returns for the Metaverse Portfolio

Returns for the Metaverse portfolio are ridiculously strong, as you would imagine from a portfolio like this.

Here is it benchmarked against the NASDAQ (QQQ), which itself has had a very strong 5-year performance:

Survivorship bias?

To be fair, there is a bit of survivorship bias in the selection process, because you’re basically screening for stocks that did well historically, and using it to construct the Metaverse portfolio.

So while the historical returns are very strong, that is probably to be expected from the selection methodology.

The better question might be how well the returns will be like going forward?

And that’s quite a tricky question to answer.

On one hand you have rising interest rates and rising inflation, which will create powerful headwinds for a tech heavy portfolio like this.

On the other hand, this is an actively managed portfolio, so maybe OCBC RoboInvest can work some magic with their tactical asset allocation.

And longer term, there are quite powerful secular tailwinds in play for technology and the Metaverse, which I suppose is the whole point of this portfolio.

High Risk Portfolio + $10,000 minimum investment

In any case, OCBC RoboInvest has tagged the Metaverse Portfolio as “High Risk”, which I think is about right given that (1) this is a pure equities portfolio, and (2) the stocks selected are high beta counters.

It is intended for “Experienced Investors”, and the minimum investment sum each time is $10,000 USD.

This actually makes the portfolio hard to dollar cost average (DCA) in on a monthly basis. Those who want to DCA will need either very strong cash flow or may want to pool their capital for a few months before investing the next tranche.

Fees on Metaverse Portfolio

Fees are a flat 0.88% per year.

Because OCBC RoboInvest invests directly in the underlying stocks, this isn’t like other robo-advisors where you still need to pay another layer of ETF fees on top of the platform fees.

So the 0.88% is the all-in fees.

There are no custodian fees layered on top of that, but do note that any forex fees will be paid by the customer.

Other Options to invest in the Metaverse? DIY vs OCBC RoboInvest

That said, with $10,000, it’s not easy to get diversified exposure to a basket of 20 metaverse stocks if you DIY invest, given that some names like NVIDIA have a stock price of $200+.

Transaction costs and time spent will add up too, even before you consider the rebalancing.

My views on the Metaverse Portfolio – Will the strong historical performance hold up?

Like I shared in the OCBC RoboInvest Review, I think it’s very admirable what OCBC is trying to do.

They’re basically saying that hey, I’m going to try and build this metaverse portfolio, benchmark it against the NASDAQ (QQQ), and try to outperform it.

I mean, how many active managers out there would dare to try and outperform the QQQ, with its 28% annualised returns (5-year basis).

So big kudos to OCBC for even trying.

High beta stocks could be tricky with rising interest rates

Where it gets trickier, is to try to anticipate the future returns of the portfolio.

A lot of high beta stocks like those that go into this Metaverse portfolio have had a very poor January, so it remains to be seen if that will be indicative of the rest of the year.

Rising interest rates and sticky inflation could also be tricky for a portfolio like that.

Who is this portfolio designed for?

I think at the end of the day, whether the Metaverse portfolio is right for you, kind of goes back to the kind of investor you are.

I asked OCBC who their ideal audience for OCBC RoboInvest was, and this was their answer:

  1. Beginner Investors – early 20 or early 30s, first time investors who do not want to actively monitor the market
  2. More experienced investors who want to diversify into specific themes (like Metaverse)

And I really think they hit the nail on the head right there.

For these 2 groups of investors, especially those who don’t want a plain vanilla ETF approach and want a fund manager who will try to actively outperform, OCBC RoboInvest could be a great choice.

And if you’re one of these and you want to find a way to invest in the Metaverse over the longer term, and you have a high-risk appetite, this could be an interesting play.

In a way it’s like a riskier version of the NASDAQ QQQ. Higher risk, but also potentially higher returns if things turn out well longer term. No doubt there will be volatility in the short term with rising rates, but with a portfolio like that you’re going to want to ride the longer term secular trend in technology and the metaverse.

How to sign up?

If you’re keen to try out the portfolio, or just to explore more details generally, check out the link below!

Steps to sign up:

  • For existing OCBC customers – simply click on this link and it will prompt you to login before taking you directly to the Metaverse Portfolio page within OCBC Digital App or Internet Banking to invest in the Metaverse Portfolio.
  • For new OCBC customers – simply click on this link and click on the “Invest Online” button to sign up for Online Banking. You will be able to open your OCBC account instantly and then proceed to invest in the Metaverse Portfolio.


Note: This post was sponsored by OCBC. All views and opinions expressed in this post are from Financial Horse.


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