What the ETF? There’s a fintech and blockchain ETF coming to the ASX
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The ASX ETF sector could soon welcome a blockchain focused ETF to its ranks.
ETF Securities is currently planning an ETF Fintech and Blockchain ETF and it is inviting investors to register their interest in the product.
While the ASX is gradually embracing blockchain technologies – using it to replace its CHESS system – share price success has eluded the majority of companies in that space.
But speaking with Stockhead yesterday as his firm launched its hydrogen ETF, ETF Securities’ Kanish Chugh said this fund’s investees would be in a different class.
He says while regulatory approvals are pending, ETF Securities hoped to get it off the ground by the end of the year.
“The idea behind that fund is to give investors exposure to very liquid companies listed in developed markets,” Chugh said.
“These aren’t companies that are foreign to us, these aren’t companies that aren’t already in other funds themselves – other ETFs and other active funds.
“So investors, if they wanted to, could invest in a lot of the companies that ETF will give exposure to directly on the US, for example. They’re not foreign companies in the sense of not being familiar to a lot of investors.
“That particular ETF will look at a lot of different themes in the fintech space – in particular blockchain and decentralised finance. We’re hoping to launch it in coming weeks but pending regulatory approval.”
While it would be the first of its kind in the ASX, coming three years after Betashares raised interest for a Global Blockchain Innovators ETF which didn’t get off the ground, it is not without precedent globally.
Two similar ETFs in the US are the Amplify Transformational Data Sharing ETF (NYSE:BLOK) which invests in companies that utilise blockchain technologies, one of which is Square (NYSE:SQ) which will be coming to the ASX next year thanks to its takeover of Afterpay (ASX:APT).
In the past 12 months, BLOK has gained over 90%.
Another is the Goldman Sachs Finance Reimagined ETF (NYSE:GFIN) which also invests in Square as well as Visa, PayPal and Mastercard.
September was a tough month for equities and it showed in the ETF space with just a handful notching up gains.
Curiously, the top ETF was Van Eck’s China A50 ETF (ASX:CETF) which is one that has lagged for much of this year thanks to Sino-Australian trade tensions.
It is now in slightly positive territory on a 12-month basis and is up 26% in five years.
The picture looks more rosy for ETFs on a yearly basis.
The top ETF is BetaShares’ Geared US Equities (ASX:GGUS), up 68% in 12 months.
A further two ETFs in the top 10 are focused in the US but there are also some with an individual sector focus – such as ETF Securities’ Battery Tech & Lithium ETF (ASX:ACDC).