Alternative Investments/Digital: ETC and HANetf Launch ETF For Digital Assets And Blockchain
The ETC Group Digital Assets & Blockchain Equity UCITS ETF will list on the London Stock Exchange.
The proposed ETC Group Digital Assets & Blockchain Equity UCITS ETF (KOIN) from long-time collaborators ETC Group and HANetf will offer thematic exposure to companies active in the digital assets and blockchain system.
The ETF comes in US Dollar and Pound versions and is a liquid, low-cost vehicle that will invest in companies operating in crypto mining, blockchain technology, and cryptocurrency exchanges and trading. (ETF Strategy)
The total expense ratio of the fund is only 0.60%.
ETC Group and HANetf previously collaborated on the multi-billion dollar BTCEtc – ETC Group Physical Bitcoin (BTCE), which is now the largest directly backed Bitcoin (BTC) exchange traded product (ETP) in the world.
ETC Group Digital Assets & Blockchain Equity UCITS ETF
The ETF will track the Solactive ETC Group Digital Assets and Blockchain Equity Index which selects its constituents from a universe of developed market stocks with market capitalizations above $100 million and average daily trading volumes greater than $1 million.
Solactive’s proprietary natural language processing algorithm, called ARTIS, is used for security identification. It identifies firms linked to a specific theme by screening publicly available information such as financial news, business profiles, and company publications for appropriate keywords.
The algorithm is programmed to identify companies with business operations linked to the provision of blockchain-based solutions and services, the mining of digital assets, the development of hardware and software used in blockchain applications, the provision of cryptocurrency and NFT marketplaces, the provision of services to the blockchain industry, and the operation of blockchain farms.
Each company identified by the algorithm is then scored to reflect its exposure to the theme based on the intensity of relevant keywords.
Eligible firms are classified as either ‘pure-play’ or ‘non-pure-play’.
Pure-play companies operate in the fields of cryptocurrency mining, blockchain technology, or cryptocurrency custody, trading, and exchanges.
The methodology selects all pure-play companies for inclusion.
Research from ETC Group showed KOIN’s underlying index has a 0.7 correlation to bitcoin.
Commenting on the launch, Bradley Duke, CEO of ETC Group said: “Digital assets and blockchain have begun to persist in almost every sector and industry worldwide. Due its secure data, transparency and efficiency, blockchains and distributed ledger technologies are transforming a wide variety of industries, from banking and financial services, to healthcare and life science.”
Hector McNeil co-founder and co-CEO at HANetf, added: “Investors are increasingly looking for alternative ways to access both underlying crypto markets and the blockchain technology underpinning this high growth industry, and they can do this both through ETC products such as the BTCetc Bitcoin Exchange Traded Cryptocurrency (BTCE) and now through KOIN. This is similar to the way investors access gold through both investing in the commodity directly and also through and gold mining companies or gold miner ETFs.”
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