Grayscale Investments entered the ETF space today with the launch of the Grayscale Future of Finance ETF (GFOF). The new fund invests in foreign and domestic financial companies that support the digital assets and cryptocurrency industries.
GFOF comes with an expense ratio of 0.70% and lists on the NYSE Arca.
“Through GFOF, investors now have the opportunity to receive exposure to the companies that are pivotal to the evolution of the global financial system,” said David LaValle, Grayscale’s global head of ETFs. He notes that the launch of GFOF the first step in the firm’s strategic expansion into the ETF space.
Grayscale has made it clear that it plans to convert its nearly $25 billion Grayscale Bitcoin Trust (GBTC) into an ETF should the SEC start allowing physical bitcoin ETFs to launch. However, there is no sign that the regulatory agency has any plans to change its policies around such products.
GFOF tracks a Bloomberg index that targets companies that are in the cryptocurrency and digital asset ecosystem and fall into three categories. The financial foundations category includes companies that facilitate transactions involving digital assets, while the technology solutions category covers companies that support the creation of applications that implement blockchain technology. The digital asset infrastructure category focuses on companies that provide infrastructure products and services to the digital assets industry, according to the prospectus.
Bloomberg’s methodology pulls information from publicly filed documents to assign three scores to eligible companies. The revenue score looks at a company’s current and expected revenue exposure to the future of finance, and the theme score considers how important the company is to the fund’s targeted theme. The regulatory score evaluates a company based on the regulatory risks it faces. Companies with mid-range to high scores in each of the three categories are included in the index, the prospectus says.
“This product draws upon our historical strengths, while kicking off the next stage of our evolution as an asset manager that helps investors build portfolios that can stand the test of time,” said Grayscale Investments CEO Michael Sonnenshein.
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