With launches flying past last year’s record, there’s also been a number of interesting filings during the past few weeks. In particular, there have been several prospectuses filed for funds that will target cryptocurrencies or related equities.
Perhaps the most immediately interesting is BlackRock’s recent filing for the BlackRock Future Financial and Technology ETF, an actively managed equity fund that will target a wide range of financial and technology companies operating in the payment systems, banking, investments, lending, insurance and software spaces.
The fund will invest in U.S.-listed common stocks and American depositary receipts, among other securities. The prospectus notes the fund can move its entire portfolio into cash or cash equivalents in environments that call for a defensive approach.
Interestingly, the prospectus does not mention cryptocurrency or bitcoin, investments that tend to be cited at least tangentially in most ETF filings in the financial category lately. The filing mentions that futures could be included in the portfolio, however.
Horizon Kinetics also filed for what will be its second listed ETF, which is a sharp 180-degree turn from its existing product. The firm rolled out the now-$1.4 billion Horizon Kinetics Inflation Beneficiaries ETF (INFL) more than a year ago. The proposed Horizon Kinetics Blockchain Development ETF will hold an actively managed portfolio of what the firm terms “blockchain development companies” that are involved in the holding, implementation and administration of digital assets. The prospectus says holdings can include exchanges, custodial banks, asset managers, software providers and crypto mining firms, among other companies.
There are a range of ETFs operating in this space, but only a handful are actively managed, and none of the funds in the category have reached a level where they can claim clear dominance relative to their peers.
Defiance, which looks to target differentiated themes with its ETFs, recently filed for the Defiance Short Blockchain and Digital Assets Industry ETF (IBIT), which would be its first inverse ETF. The fund is actively managed and seeks to provide the daily inverse return of the $820 million Amplify Transformational Data Sharing ETF (BLOK), though the prospectus notes that it’s “unlikely” the fund will offer the exact inverse of BLOK’s performance.
The fund document says that IBIT will primarily achieve its goal exposure through short positions on BLOK and swap agreements with large financial companies.
Simplify ETFs filed for the Simplify Bitcoin Strategy Risk-Managed Income ETF (MAXI), which will invest in bitcoin futures while looking to generate income by also holding high quality short-term U.S. Treasury securities and ETFs that invest in them.
Some of those holdings will also serve as collateral for the futures portion of the portfolio. Simplify is known for using options strategies in its products, and MAXI will include an options overlay as well, according to the related fund document.
SoFi, which targets a younger cohort of investors, filed for the SoFi Web 3 ETF (TWEB) in April. Web 3.0 refers to what is expected to be the next stage of the world wide web, which will be redefined by the application of artificial intelligence, machine learning and blockchain technology.
The fund will track the SoFi Solactive ARTIS Web 3.0 Index, which targets the themes of big data and artificial intelligence; blockchain technology; metaverse; and NFTs and tokenization.
The index selects 10 companies from each of the four categories for a total of 40 components, which are weighted based on their exposure to the category’s theme, with individual holdings limited to 5% of the index weight, the prospectus says.
Contact Heather Bell at [email protected]