Metaverse VR glasses

Metaverse market – an investor perspective

Anyone setting up a thematic equity fund must be convinced of the long-term growth prospects of their chosen sector. DWS fund manager Manuel Mühl launched a metaverse fund at the beginning of 2023.

Manuel Mühl and his colleagues have included shares of around 200 companies in the investment universe of their fund. They monitor each of them closely. Mühl knows the market well and constantly exchanges ideas with the management of the listed companies, with analysts and experts. He knows that, for many of these companies, the metaverse is not a flash in the pan; it is their future: “For some, the metaverse is part of the corporate strategy. For others, we ask: what additional growth opportunities can the metaverse unleash for traditional business models?“

For all companies in the fund's investment universe, Mühl believes that the metaverse has “enormous acceleration potential“. Below are Mühl’s insights in terms of growth, monetisation, data, use, and range.


The team already sees real added value in three growth areas in particular: computing power, digital content, as well as assets and services.

Metaverse billboard

The metaverse as a billboard

Mühl and his colleagues are convinced that companies will spend more and more money on online advertising and thus in the metaverse. In the virtual worlds, the effect of marketing campaigns can be measured precisely. Users encounter a brand not only in virtual salesrooms or when using digital products; visitors also spend time in the transition from one virtual world to the next, in so-called loading zones, which a company could use to advertise itself.

For example, users are given vouchers that they can redeem in real life - or they could earn a free restaurant visit in the metaverse for the real world. This enables companies to measure the success of their advertising more accurately than ever before. And they get a lot of data from the users – information that is of enormous value to them, explains Manuel Mühl: “The big drivers are private-sector companies whose goal is to retain customers. The more people use the metaverse, the more interesting it becomes as an advertising interface.“

Metaverse data ownership

Data ownership as a strategic advantage

Just like in the real world, user data will be an important currency in the metaverse. Mühl sees parallels to established loyalty programmes, like Payback, where the retailer knows exactly what you have bought: “We’re mesmerised by collecting points – points might add up to a free coffee machine. Of course, we know it’s not really free; the price is our data.” Users need to be aware in the virtual world just as they are in the real one: companies have a great interest in obtaining even more information about consumers. “This is why companies are investing these large sums now, so that they will soon have a strategic advantage in the form of data,“ says Mühl.

How can consumers protect themselves from surrendering even more freedoms in the virtual worlds than in the real world? Or even from being tracked from the metaverse into reality? Mühl sees the legislators as having a duty here. Some fundamental aspects must soon be clarified across country border: “It must be clear that no one can lose their digital identity or that this has implications for reality. For example, do I relinquish all rights when I click on the T&Cs, or does the very fact that I buy a headset count as implied consent to the assignment of all my data? It is important that we create a clear regulatory framework here.“

Metaverse private use

The industrial metaverse is already up and running; still potential for private users

The virtual world does not yet have the same presence as the real one. Mühl expects that the technical possibilities of the metaverse will mature considerably over the next ten years, by which time the potential of simulation in the digital spaces of the metaverse will be fully realised.

The decisive question, though, is whether users will also embrace this potential. “The interesting thing is that all books, all films, all visions on this subject are always set in dystopias – in other words, in an imagined state that no one wants to experience in reality. And yet there are already some possibilities for people to integrate this meaningfully into their everyday lives – for example, for professional meetings in virtual spaces. The pandemic has acted as an accelerator here,“ he says.

And other very practical application scenarios are already available to users: “As a builder or property manager, you can put on the headset before a property is built and walk through the new property that has not yet been built. Then you can see which rooms ought to be laid out differently or where windows might be better placed.“

In the business world, possibilities like these are already proving successful: “Similar simulation concepts are being used for business decisions. The industrial metaverse offers an overall economic added value and can be monetised now, whereas the entertainment applications that only tend to be for private use can only become profitable if the number of users increases significantly. For this to happen, though, the price of headsets must drop to allow the masses to buy one and they need to become much more comfortable for the wearer,“ says Mühl.

Metaverse reach

One mega-verse or numerous digital sub-worlds?

Will there ultimately be an overarching metaverse in which everything takes place? Just as there is a real world – with many continents and even more countries, it will eventually be the same in the metaverse, Mühl says. “For the metaverse to work effectively, the different sub-worlds have to be connected. Imagine buying fancy sneakers in real life but having to change your shoes every time you cross a border.“

For example, if you buy a digital device in a game world for real money, you don't want to be able to use it only in a limited space. “If I buy that in one world, I want to be able to use it in another; otherwise it reduces its economic value. In this respect, you will inevitably have an overarching  metaverse at some point. Only then will these economic applications also be attractive from a consumer perspective and monetise properly.“

Metaverse future in starting blocks

The future in the starting blocks?

Figures from a KPMG study recently confirmed what Mühl has gleaned from his conversations with company leaders. 60 percent of senior managers   agreed that  the metaverse is an important topic for the future of their company. When asked what they are already doing in this area, just as many said: nothing at all.

Mühl's conclusion: more and more company leaders recognise that the topic is important, but most have not yet made any investments. “Of course, if they start investing slowly now –the fact that the big players are leading the way will ultimately force them to follow suit – then much more capital will flow into the topic. Accordingly, progress will be much faster than you might think so far.”

Avatars Manuel Mühl and team

About Manuel Mühl and his team

Manuel Mühl (upper right corner) has been working in the financial industry for about 10 years. Before joining the DWS technology team as an equity fund manager, he worked as an equity analyst and portfolio manager at various banks and fund companies. At DWS, he is responsible for research in the areas of internet, online media and entertainment. Mühl studied economics and is a member of the German Association for Financial Analysis and Asset Management. He holds the analyst titles CIIA and CEFA.

Together with his colleague Felix Armbrust and support from Tobias Rommel and Zegun Zhang, he manages DWS Metaverse Invest, which was launched in February 2023. The fund's assets are primarily invested in equities of companies whose business benefits from or is currently linked to the development of the digital world, especially the metaverse.

Maike Tippmann avatar

Maike Tippmann

… is responsible for digital communication projects in Deutsche Bank’s Newsroom.

A few years ago, she balanced with one of the first VR headsets on a narrow wooden plank lying on the ground over a deep canyon in the Brazilian rainforest and was really scared to death. Since then she has known how disturbing real virtual experiences can feel.

She feels completely at home in the real world and, despite all her curiosity about new opportunities and possibilities, strives for awake skepticism. Above all, she thinks her data belongs solely to her.

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