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The Virtual Reality ETF Is On The Way

Tech has been the market's leading sector for a while now, and those subsectors focused on emerging tech have generally done better. Think artificial intelligence, robotics, etc. Defiance ETFs has filed for three new funds targeting specific niches in the high tech space.

According to the fund's filings...

The Augmented & Virtual Experience ETF "consists of a modified equal-weighted portfolio of the stock of companies whose products or services are predominantly tied to the development or commercialization of augmented or virtual reality technologies. Such technologies include artificial intelligence; gaming systems; graphic processing units; image and touch display manufacturing; sensors used for touch, depth, or image perception; and software or applications dependent on augmented and virtual reality."

The Quantum ETF "consists of an equal-weighted portfolio of the stock of companies whose products or services are predominantly tied to the development of quantum computing and machine learning technology. Such technologies include research and development of quantum computers; use of quantum computing for applied sciences or communications; development of technology-enabled interactions between quantum and traditional computers; development of advanced hardware and/or software used in machine learning; production of specialized machinery used in advanced semiconductor and integrated circuit packaging; or the production and/or processing of raw materials used in quantum computing."

The Vehicle & Technology Innovators ETF "consists of an equal-weighted portfolio of the stock of companies whose products or services are predominantly tied to autonomous driving technology. Such technologies include global positioning systems (GPS) and sensors, network connectivity, display and control systems, and autonomous automobile manufacturing."

The most interesting of the three to me is the Virtual Reality ETF. The autonomous driving space has already been covered by multiple ETFs. The same goes for quantum and machine learning. The virtual reality space is more unique. My hesitation (without seeing the fund's holdings, of course) is that it ends up looking like a large-cap tech fund. That's a similar problem that's befallen some of the blockchain ETFs.

There were no expense ratios given, but I'd imagine they'd fall somewhere between 0.50-1.00%. Given how the robotics ETFs have exploded in assets, it's reasonable to think these funds could do well, but only if the performance follows.