If you would like to add blockchain exposure to your investment portfolio without buying cryptoassets, you could buy shares in blockchain funds.
Read on to discover five new entrants in the blockchain investment funds space that launched in 2021.
What are blockchain investment funds?
Blockchain investment funds are investment vehicles that invest in a basket of shares in crypto companies or companies developing or deploying blockchain technology.
You can buy shares in blockchain funds to gain exposure to the fast-growing crypto and blockchain industries.
Most blockchain funds come in the form of ETFs (exchange-traded funds), which can be traded like stocks on major securities exchanges. Provided you have an online brokerage account that gives you access to global stock exchanges, you should have no issue investing in blockchain funds.
Top new blockchain funds
Let’s dive in and explore the latest additions to the blockchain fund universe.
Bitwise Crypto Industry Innovators ETF
BitWise Crypto Industry Innovators ETF (BITQ) is an equity-focused ETF that enables you to invest in companies involved in the crypto economy. The index fund primarily tracks the performance of the Bitwise Crypto Innovators 30 Index. As the benchmark implies, the index has 30 holdings.
The eligibility requirements for a company to be included in the index are: the company must derive at least three-quarters of its revenue from the crypto ecosystem or have a minimum of 75% of the net assets tied up in digital assets.
At any given time, crypto innovators will make up 85% of the index, with the remaining 15% being made up of companies with at least USD 10bn in market capitalization, and have a footprint in the crypto economy.
Fund details (at the time of writing):
- Assets under management (AUM) – USD 134m
- Number of holdings – 30
- Expense Ratio – 0.85%
- Ticker – BITQ
Global X Blockchain & Bitcoin Strategy ETF
Global X Blockchain & Bitcoin Strategy ETF (BITS) is an actively managed fund that aims to track the long-term performance of the blockchain ecosystem. Launched in November 2021, the fund takes long positions in bitcoin futures contracts and invests in companies associated with blockchain technology.
BITS also invests in blockchain-related stocks in Global X Blockchain ETF (BKCH), which is a passively managed ETF by Global X. BITS current holdings consist of a 49% weighting in BKCH, 26% weighting in bitcoin (BTC) futures for February 2022, and 23% in bitcoin futures for January 2022.
- AUM – USD 10.3m
- Number of holdings – 3
- Total Expense Ratio – 0.65%
- Ticker – BITS
Global X Blockchain ETF
Global X Blockchain ETF (BKCH) invests in blockchain-focused companies involved in crypto mining hardware, blockchain applications, crypto payments, and mining farms.
BKCH tracks the performance of the Solactive Blockchain Index, which represents a basket of stocks tied to cryptos and blockchain technology. The index comprises three categories of companies: Pure-play stocks that generate at least half of their revenues from blockchain activities, pre-revenue blockchain companies, and diversified companies that generate less than half of their revenues from blockchain activities.
- AUM – USD 125m
- Number of holdings – 25
- Total Expense Ratio – 0.50%
- Ticker- BKCH
Simplify US Equity PLUS GBTC ETF
Simplify US Equity PLUS GBTC ETF (SPBC) offers investors a diluted exposure to bitcoin by providing 100% investment in equity, and an extra 10% to BTC via the Grayscale Bitcoin Trust.
The majority of SPBC’s market exposure is through its holdings in ISHARES S+P 500 INDEX FUND weighted above 80%. It also invests 13% in the Grayscale Bitcoin Trust and a further 14% in the S&P500 EMINI FUT DEC21.
- AUM – USD 124m
- Number of holdings – 3
- Gross Expense Ratio – 0.74%
- Ticker – SPBC
VanEck Digital Transformation ETF
VanEck Digital Transformation ETF (DAPP) tracks the price and yield performance of the MVIS Global Digital Assets Equity Index, which tracks the performance of companies that are involved in the global crypto markets.
Companies in this index have the potential to derive at least half of their annual revenue from cryptoassets. The fund has invested 75% of the portfolio in technology stocks, with the remainder invested in financials and a tiny portion in cash.
- AUM – USD 66.6m
- Number of holdings – 26
- Net Expense Ratio – 0.50%
- Ticker – DAPP
Blockchain funds provide another way to add crypto and blockchain exposure into a diversified investment portfolio. Also, most blockchain ETFs have annual fees of under 1%, so you don’t have to worry too much about fees eating into your returns.
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