Today, AdvisorShares unveiled two very different actively managed ETFs.
The AdvisorShares Managed Bitcoin Strategy ETF (CRYP) invests mainly in bitcoin futures, while the AdvisorShares Drone Technology ETF (UAV) focuses on companies that generate at least half of their revenue or profits from the manufacture of drones or the development of related technologies.
CRYP comes with an expense ratio of 1.61%, while UAV charges 0.99%. Both list on the NYSE Arca.
Bitcoin Futures ETF
CRYP invests primarily in other U.S.-listed ETFs that hold bitcoin futures and can also invest in bitcoin futures either directly or through a Cayman Islands subsidiary. It also holds short-duration fixed income or cash equivalents, according to its prospectus.
Morgan Creek Capital Management subadvises CRYP.
A press release from AdvisorShares notes that the fund actively manages its risk based on expectations around bitcoin movements, and can move fully into fixed income if necessary.
“We feel that digital asset seasonality is a good thing for investors, and while volatility can surface, CRYP provides a risk-managed offering that seeks both to capture upside return and provide a smoother investment ride. We’re excited about this ETF and how investors can use it as a diversification tool for their digital asset exposure,” said Morgan Creek CEO and CIO Mark Yusko.
CRYP’s expense ratio includes 65 basis points in acquired fund fees and expenses. The first-ever bitcoin futures ETF, the $1.13 billion ProShares Bitcoin Strategy ETF (BITO), charges 0.95%.
UAV includes autonomous vehicle technologies under its purview and takes a broad approach to the drone ecosystem, targeting companies with dominant positions in the space or strong growth prospects. Those companies can be engaged in anything from development of technologies to providing support services to actually using drones or autonomous vehicles in their business.
The fund invests primarily in U.S.-listed securities that are generally selected from industries or subindustries that include aerospace and defense; auto parts and equipment; commercial services and supplies; computer and electronics retail; electronic equipment, instruments and components; machinery; electronic manufacturing services; semiconductors and semiconductor equipment; and telecommunication services. UAV’s prospectus also notes that at least 25% of the portfolio will be allocated to the companies in the aerospace and defense industry.
The AdvisorShares fund is not the first drone ETF to list on a U.S. exchange. The ETFMG Drone Economy Strategy ETF launched in 2016 with the ticker IFLY. It failed to gather assets and was converted into the Wedbush ETFMG Global Cloud Technology ETF (IVES) in 2020. Six years after IFLY's launch, it may be that the timing is better for such a product, given that the drone industry has undergone significant development.
Contact Heather Bell at [email protected]