Investors can now put money into overseas blockchain businesses following the rollout of the Reality Shares Nasdaq NexGen Economy China ETF (BCNA), which tracks an index filled with Hong Kong and mainland China-based companies that are developing and rolling out blockchain technology.
The fund’s proprietary index, which was co-developed by Reality Shares and Nasdaq Inc., employs a rules-based, quantitative methodology that looks at a company’s role in the blockchain technology ecosystem and its participation in industry groups. The index also evaluates how much a company’s blockchain technology is developed, how it’s innovative, how it has an economic impact and how it is publicly referenced. In addition, it considers the amount a company spends on blockchain-related research and development.
All of these factors produce a score to identify companies that could be movers and shakers within the blockchain space, and which might benefit the most from blockchain technology. The index can include 30 to 100 companies, which are weighted on their blockchain scores. The fund’s gross expense ratio is 0.78%.
BCNA is Reality Shares’ second blockchain-focused ETF, following the mid-January launch of the Reality Shares Nasdaq NexGen Economy ETF (BLCN).
Rex Shares, Brian Kelly Join Forces For Blockchain ETF
Elsewhere on the blockchain front, the REX BKCM ETF (BKC) invests in companies involved with cryptocurrencies and blockchain technology. The fund is a collaboration between exchange-traded product provider Rex Shares and Brian Kelly, a portfolio manager and CNBC Fast Money correspondent.
BKC invests across the blockchain ecosystem in what fund literature describes as “Wall Street disruptors” (i.e., securities trading platforms and companies disintermediating venture capital), crypto miners and traders, enterprise blockchain leaders and “decentralized internet builders.” The fund’s expense ratio is 0.88%.
Kelly is the founder and CEO of BKCM Funds LLC, an investment firm focused on digital currencies and blockchain technology that was established in 2013. Kelly is the lead portfolio manager of the actively managed BKC fund, and his experience in this space is promoted as a selling point that differentiates BKC from existing blockchain-focused ETFs on the market.