LONDON – Investment management company Invesco launched a new blockchain-based exchange traded fund (ETF) on the London Stock Exchange today.
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The Invesco Elwood Global Blockchain UCITS ETF has been developed in partnership with Elwood Asset Management (Elwood), an investment firm specializing in providing institutional investors with exposure to digital assets and blockchain technology.
“Blockchain has been around for a decade, but many people still see it just as the technology behind cryptocurrencies,” said Bin Ren, CEO of Elwood.
“The true potential, however, may extend far beyond that. We are beginning to see the technology being used by financial services companies in particular, but we expect greater application of blockchain technology across a wide range of industries.
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.”
In terms of the largest sector allocations, the index currently has 46% in information technology, 23% in financials, 9% in communication services and 8% in both the materials and consumer discretionary sectors.
The three largest geographical allocations are to the US (39%), Japan (29%) and Taiwan (12%).
Chris Mellor, Head of EMEA 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.”
The ETF aims to deliver the performance of the Elwood Blockchain Global Equity Index by physically investing in the index constituents.
The index offers exposure to global companies in developed and emerging markets that participate or have the potential to participate in the blockchain ecosystem. It is designed to evolve with the potential growth of blockchain technology.
Kevin Beardsley, Head of Business Development at Elwood, commented, “The majority of the index is currently allocated to companies where the value attributable specifically to blockchain technology is either in the ‘developing’ or ‘potential’ phase. These are companies with assets that are well-positioned to capitalize on the emerging opportunities for blockchain. Over time, however, we would expect the balance to shift naturally to companies with more significant direct exposure to blockchain-related earnings as the technology becomes more ubiquitous.”
The index is calculated for Elwood Asset Management by Solactive AG, a globally recognized index provider with expertise in tailor-made indices.
The index is reviewed and rebalanced quarterly.
The Invesco Elwood Global Blockchain UCITS ETF is the latest example of Invesco’s expertise in identifying new and interesting segments of the market and creating funds that enable investors to access those opportunities efficiently.
Invesco launched the first ETFs in Europe that provided targeted exposure to the financial technology and biotechnology sectors, and the firm also offers a full range of US and European sector ETFs.