For many people, purchasing a home is one of the biggest decisions and transforming events of a person’s life. It is also one of the most frustrating and inefficient processes that often takes months to complete with considerable transaction costs. While other industries have evolved to take advantage of new technologies to create timing and cost efficiencies, the real estate industry has yet to benefit from these advancements, continuing to operate at similar speeds and costs as it did pre-internet. The good news is that there are a number of real estate technology companies looking to solve the pain points of a typical real estate transaction, thus providing this and future generations with a much better home buying experience.

Identifying a Home

Zillow launched in 2006 and currently has more than 135 million properties listed in its database, representing more than 29% of real estate-related website traffic.[1] But identifying a home to purchase goes beyond browsing listings, as the next step is typically emailing or calling the broker to see the properties of interest. This is where the inefficiencies come into play, inefficiencies that Matterport, Inc. (Matterport) is looking to solve. Matterport is the leading spatial data company focused on creating interactive 3-D models and tours of real estate properties. These virtual tours allow homebuyers to walk through a property from anywhere, anytime, which helps homebuyers filter out homes that may not be a fit and hone in on the ones that are. With the enhancements of virtual reality hardware from companies like Facebook and Apple, in the near future, the first round of home shopping will be immediate and virtual.

Making an Offer

You just finished a virtual tour of a property and want to make an offer. It’s 2022—you should be able to propose an offer online. Companies like OpenDoor Technologies Inc. (OpenDoor) help facilitate this part of the process. OpenDoor, founded in 2014, has rebuilt the entire consumer real estate experience by making buying and selling possible through its mobile or desktop app.

Paying for the House

According to the National Association of Realtor’s 2021 Profile of Home Buyers and Sellers, 87% of recent buyers financed their home purchase.[2] For first-time buyers, this number increases to 93%. The mortgage process from application to funding takes almost two months on average and is often the part that causes delays in execution. Some lenders such as Rocket Companies (Rocket) are looking to leverage technology to streamline and simplify the mortgage process. Rocket has built a mortgage process that is completely online and can generate a pre-approval for a mortgage within a matter of days. This is important for homebuyers who need to understand exactly what they can and can’t afford.

Investing in these Technologies

With approximately 6.1 million homes purchased in the U.S. in 2021[3] averaged at nearly $400,000, the economic potential for the technology companies innovating around the homebuying process is tremendous.[4] The ETFMG Real Estate Tech ETF is the first exchange-traded fund that is designed to give pure-play exposure to technology companies that are digitally transforming the real estate industry in order to optimize the way people purchase homes. The ETF includes 36 global companies including Zillow, Matterport, OpenDoor and Rocket.

For more information on HHH, visit: etfmg.com/HHH.

As of 1/25/22, HHH held 5.36% in Zillow, 1.72% in Matterport, 3.64% in OpenDoor and 4.89% in Rocket. Holdings are subject to change without notice

Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477), or by visiting www.etfmg.com/HHH. Please read the prospectus carefully before investing. Securities mentioned may or may not be current holdings in the Fund and are subject to change without notice.

Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility. The Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Investments in smaller companies tend to have limited liquidity and greater price volatility than large capitalization companies. The Fund’s return may not match or achieve a high degree of correlation with the return of the Marine Money Decarbonization Index. To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the Index. Diversification does not guarantee a profit, nor does it protect against a loss in a declining market. 

The Fund is a recently organized investment company with limited operating history. As a result, prospective investors have a limited track record or history on which to base their investment decision. There can be no assurance that the Fund will grow to or maintain an economically viable size.

ETF Managers Group LLC is the investment adviser to the Fund.

The Fund is distributed by ETFMG Financial LLC. ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG is not affiliated with Prime Indexes.

The Fund is intended to be made available only to U.S. residents. Under no circumstances is any information provided on this website intended for distribution to or use by, or to be an offer to sell to or solicitation of an offer to buy the Fund or any investment product or service of, any person or entity in any jurisdiction or country, other than the United States, where such distribution, use, offer or solicitation would subject the Fund or its affiliates to any registration requirement or be unlawful under the securities laws of that jurisdiction or country.

[1] Source: iPropertyManagement

[2] Source: National Association of Realtors

[3] Source: Wall Street Journal

[4] Source: Statista

Author Portrait
Since 2020, Jesse has served as the Head of Real Estate at Republic, a multi-asset investment platform offering investment opportunities across start-up, real estate, crypto, gaming, and music to accredited and non accredited investors.

Jesse is also the Managing Principal of Advanced Fundamentals, an index and data analytics firm that developed the Brixx Commercial Real Estate Indexes, which serve as the underlying index for exchange-listed futures and options products.

Previously, Jesse was the Co-Founder and Chief Operating Officer of Compound, a real estate syndication platform that was acquired by Republic. Earlier in his career, Jesse founded ETRE Financial, a real estate technology platform where he built a trading platform specifically designed for real estate securities, created a family of REIT Indexes, and developed an innovative structure to take large commercial real estate properties public as “exchange-traded properties.”

Jesse has a background in equities trading and real estate investment banking. He graduated from Cornell University and has a Masters in Real Estate Investment from NYU.