Invesco launches Blockchain ETF on London Stock Exchange

5 years ago - Published in Fintech Land

The cryptocurrency industry has long been anticipating the launch of a Bitcoin (BTC) exchange-traded fund (ETF). However, while everyone is waiting for a Bitcoin ETF approval, an independent investment management company known as Invesco has announced the launch of the “world’s biggest blockchain-focused ETF.”

Invesco is headquartered in the United States, has branch offices in 20 different countries, and manages over $800 billion in client assets. Now, for a company first, Invesco is launching a blockchain-focused exchange-traded fund called the Invesco Elwood Global Blockchain ETF.

The ETF carries an annual management fee of 0.65 percent and aims to deliver the performance of the Elwood Blockchain Global Equity Index by “physically investing in the index constituents,” Elwood said in its statement.

The index, calculated for Elwood by German provider of financial indices Solactive AG, currently has a portfolio of 48 companies.

These include cryptocurrency chip-maker Taiwan Semiconductor Manufacturing Company (TSMC), bitcoin futures trading operator CME Group, South Korean messaging app giant Kakao, Japanese cryptocurrency exchange operator Monex Group, online retail giant Overstock, Signature Bank and Square.

The index’s sector allocations currently include information technology (46 percent), financials (23 percent), communication services (9 percent), and in materials and consumer discretionary sectors (8 percent), according to the announcement. The three largest geographical allocations are to the US (39 percent), Japan (29 percent) and Taiwan (12 percent).

Elwood CEO Bin Ren said: “We believe the potential for blockchain to change the global economy is greatly underappreciated in today’s market, much like the internet was in the beginning, when most people couldn’t see past its usefulness for email.”

Chris Mellor, head of EMEA (Europe, the Middle East and Africa) ETF equity product management at Invesco, said: “The potential for blockchain to drive real earnings is huge, but it is often hidden within companies involved in other areas. This ETF offers investors access to companies with real earnings now, but with the added potential of blockchain-related earnings not reflected in their share prices.”

Invesco’s blockchain-focused ETF is not the first to market, but it is the biggest. According to ZeroHedge, a handful of blockchain-focused ETFs have launched in both Europe and the US, but have failed to attract significant investor capital.

The largest one is the Amplify Transformational Data Sharing ETF, which has about $110 million in assets. This is significantly smaller than Invesco, which has $800 million in assets.

All in all, the launch of a sizable blockchain-focused ETF is of great importance for the cryptocurrency industry, as it legitimizes the industry and helps to spread awareness and adoption.