Tag Archives: etf

The blockchain is a digital ledger in which transactions are recorded and stored in linked data blocks, providing a secure and unalterable record of transactions.  Blockchain technology powers cryptocurrencies, which proponents argue have far more potential than just backing digital money. Blockchain ETFs aim to give investors exposure to companies that make money from blockchain or create and explore the technology. Blockchain technology is in the budding stage. Companies in this area, on the other hand, are well established. IBM, Amazon.com, and SAP are just a few examples.   Companies who want to gamble and engage in this technology want to buy regulated company stocks. ETFs, or Exchange Traded Funds, invest in companies that operate in the blockchain space.  What are Blockchain Exchange Traded Funds (ETF)?  An ETF is an investment product based on a valuable underlying asset. For example, a blockchain ETF invests in blockchain assets such as equities of blockchain firms, virtual currencies, and crypto trading activity, to mention a few.   On the other hand, a blockchain ETF does not have to invest in companies that deal with cryptocurrencies like Bitcoin.  When someone invests in an ETF, they are investing in the assets – which means, based on investment value in the fund, they possess the right to profit from the underlying assets.   While the legality of blockchain ETFs is apparent, certain regulators continue to prohibit Bitcoin and crypto ETFs due to liquidity and valuation issues. Bitcoin ETFs are more volatile than blockchain ETFs.  How do Blockchain ETFs work?  Aside from profit from advancements in blockchain technology, there are several advantages to investing in ETFs.  For example, the BLCN ETF tracks the Reality Shares Nasdaq Blockchain Economy Index. The index comprises equities from firms involved in blockchain technology research, development, support, and use, as well as related businesses.  When a company is studied for inclusion in the index, its stock is given a "Blockchain Score" based on several factors, including how the company contributes to the blockchain ecosystem, its blockchain products, economic impact, research and development expenditures, and its results and innovations.  The index includes all of the top 50 to top 100 firms with strong ranking scores. Every six months, rebalancing takes place and calculates new blockchain scores.  Finally, the ETF uses the benchmark to analyze the returns of each of the equities in the index and the company's overall "contribution" to the blockchain economy. The goal is to track the value of the blockchain economy and its growth, as indicated by the index's top-performing enterprises.  Blockchain ETFs have $1.42 billion in assets under management and trades are made on the New York Stock Exchange. On average, the expense ratio is 0.64%.  With $950.22 million in assets, the Amplify Transformational Data Sharing ETF BLOK is the largest Blockchain ETF. The best-performing Blockchain ETF in the previous year was LEGR, which returned 0.27 percent.   The Defiance Digital Revolution ETF NFTZ, established on 12/01/21, was the most recent ETF in the Blockchain field.  ETFAUMDescriptionAmplify Transformational Data Sharing ETF (NYSEMKT: BLOK)$1.06 billionThe largest blockchain ETF by net assets.Siren Nasdaq NexGen Economy ETF (NASDAQ: BLCN)$244 millionThis ETF is focused on tracking the Nasdaq Blockchain Economy Index.First Trust Indxx Innovative Transaction & Process ETF (NASDAQ: LEGR)$152 millionThis ETF has a portfolio of more than 100 stocks with exposure to blockchain technology.Bitwise Crypto Industry Innovators ETF (NYSEMKT: BITQ)$111 millionLaunched in 2021, this is a focused portfolio of crypto and Bitcoin (CRYPTO: BTC) stocks.Global X Blockchain ETF (NASDAQ: BKCH)$102 millionAnother newcomer in the blockchain ETF space. 1. Amplify Transformational Data Sharing ETF Holds 47 securities from throughout the world, with roughly three-quarters of them based in North America and the rest in Asia and Europe.  2. Siren Nasdaq NexGen Economic ETF Comprises 64 stocks, focuses on technology companies, and has less exposure to cryptocurrency-holding corporations than other similar ETFs. This ETF features a nearly 50/50 split of domestic and overseas companies.  3. First Trust Index Innovative Transaction & Process ETF The most diverse blockchain and crypto ETF with 103 stocks. A bit more than a third of its portfolio comprises companies situated in the United States.  China is the second-largest region represented, with the rest coming from Europe and Asia. 4. Bitwise Crypto Industry Innovators ETF Consists of 30 different stocks. In a significant way, the Bitwise Crypto Industry Innovators ETF varies from the other funds.   The portfolio's equities are a more focused bet on the crypto industry, with many of them being Bitcoin miners and other businesses that are accumulating the top cryptocurrency.  Bitwise Crypto Industry Innovators ETF has generally tracked the price of Bitcoin since its inception, owing to its bias toward companies that own Bitcoin and other crypto pure-plays.  5. Global X Blockchain ETF The list's newest, most minor (in terms of AUM), and most recent. The ETF consists of only 25 equities.   Although there are a few IT companies in the portfolio, such as Coinbase, Nvidia, and PayPal, most of the holdings are crypto mining companies. FAQs What are some top-performing blockchain ETFs? Some top-performing blockchain ETFs include BLCN, LEGR, BLOK, etc. How do I invest in blockchain? There is no method to directly invest in blockchains, as of January 2022. However, an investor can invest in companies and technologies developing services and products that use blockchain. How many blockchain ETFs are there? There are 11 blockchain ETFs in the US market with a total AUM of $714.85M. Consult our expert advisor to get the right plan TALK TO AN EXPERT

Active ETFs and Passive ETFs the words actively and passively convey a meaning that has a positive and a negative connotation. However, in the parlance of ETFs, it is not the case. In the point of ETFs, sometimes being passive rather than active can help. In this article, let’s try to understand what they stand for and how one stands against the other, or are they just different investment strategies?  What are Passively Managed ETFs?  Passively managed ETFs are the ETFs that directly replicate the underlying index. The investment strategies of the ETF are governed by the underlying index and not the conscience of the fund manager. Let’s understand with an example, the Vanguard S&P 500 ETF (VOO) is a passive ETF that tracks the S&P 500. The ETF has 507 shares in it, and the index has 505. The standard deviation is 17.42% and 17.41%, respectively, thus, showing shows how closely the ETF tracks the index.   Passive investment means moving along the market, i.e., owning it rather than outpacing it. Owning the market means having a portion of all the underlying index shares and mimicking its growth rather than running ahead. Conservative passive investors feel that consistently beating the market is impossible or, at best, extremely implausible.   Passive funds are cheaper to own and administer, and this lowers the expense ratio of the ETF. In our above example, the Vanguard ETF has a meager expense ratio of 0.03%. Most passive investors believe that these funds outperform the actively managed funds in the long run due to lower costs, and not all can be above average.  However, not everything is excellent; passive investing comes with problems and criticisms. Passive ETFs are subject to market risks and lack flexibility. The fund managers are helpless if the index goes against the ETF strategy, and they cannot alter the underlying assets to cushion such volatility.   One of the most significant drawbacks of these ETFs is that they track capitalization-based indices. The larger the market capitalization of a stock, the higher its weight in the index and consequently in the ETF. This reduces the diversification of the ETFs and makes the ETF returns susceptible to the performance of such large-cap firms.  What are Actively managed ETFs?  An actively managed ETF is a type of exchange-traded fund. A manager (or a team) chooses the underlying portfolio allocation rather than an index or a rule. Active ETFs generally try to outperform a specific benchmark or a sector. The managers are free to select any strategy to deliver the promised gains to the investors.   The ETF has an underlying benchmark index, but the manager can alter the allocation of the securities as the manager sees fit – thereby generating a return that does not mimic the index.  Let’s understand with the help of an example. The SPDR SSGA Global Allocation ETF (GAL) has an allocation in various stocks, bonds, and ETFs spanning several sectors of the economy and the globe. The ETF also has exposure to corporate bonds, emerging markets, and small-cap stocks.  An actively managed ETF allows the investor to course-correct during market volatility and provides a pioneering solution to asset management.   Such strategies are also common in mutual funds, but they become an attractive option since ETFs have lower costs than mutual funds. The GAL ETF has an expanse ratio of just 0.35%.  However, the actively managed ETFs also have several drawbacks. Active ETF fund managers have the option to trade outside of a benchmark index, making it more difficult for investors to predict the composition of their future portfolios. Such ETFs have a higher expense ratio than the traditional passive ETFs.   In our examples, the expense ratio of both these ETFs differed by almost 0.32%. The pressure to beat the market might hamper asset allocation, and the ETF might underperform the actual index. Most fund managers adjust budgets based on market conditions; the fund may become less diversified than a passive ETF.  Actively managed ETFs and passively managed ETFs is an effective and popular investment techniques for ETF investors.

Potomac Funds, a mutual fund provider, was created by Direxion in 1997. The name came from the Potomac River, close to the company's first location in Alexandria, Virginia.   Potomac Funds was the second company to offer an inverse mutual fund in November 1997, after Rydex Investments did so in 1994. In 2006, the corporation adopted the Direxion moniker.   The use of the word "X" in the new name was to call attention to the company's leveraged index products. The business was the first to offer 3X leveraged ETFs in November 2008.  The company has Assets Under Management of approximately $ 30.8 billion as of 31 December 2021. Direxion provides investors with products like ETFs and mutual funds.   The company provides strategic and thematic ETFs and advanced ETFs like leveraged ETFs and inverse ETFs. Direxion offers non-traditional investments to accommodate various market cycles.  For financial advisors, individual investors, institutions, and active traders, Direxion specializes in providing solutions that deliver  A means of seeking broader diversification dampened volatility and income or excess returns  Efficient access to non-correlated asset classes and strategies  Flexibility to position portfolios opportunistically for near- and long-term market trends  Liquid, cost-effective access to sophisticated strategies Strategic and thematic ETFs help buy-and-hold investors achieve long-term outperformance when compared to passive indexes while seeking more specific objectives such as:  Higher-income  Enhanced diversification  Reduced volatility  Excess returns and more   Strategic funds provided by the company are in the form of the following: Fund NameTickerUnderlying indexExpense ratioDirexion Auspice Broad Commodity Strategy ETFCOMAuspice Broad Commodity ER Index0.70Direxion NASDAQ-100 Equal-Weighted Index SharesQQQENASDAQ-1000.35Direxion Russell 1000® Value Over Growth ETFRWVGRussell 10000.63Direxion Low Priced Stock ETFLOPXSolactive Two Bucks Index0.50 Thematic funds provided by the company are in the form of Fund NameTickerUnderlying indexExpense ratioDirexion Hydrogen ETFHJENIndxx Hydrogen Economy Index0.45Direxion Moonshot Innovators ETFMOONS&P Kensho Moonshots Index0.65Direxion Work From Home ETFWFHSolactive Remote Work Index0.45Direxion mRNA ETFMSGRMessenger RNA Technology Index 0.65 Leveraged and Inverse ETFs provide opportunities for investors to:  Magnify short-term perspectives with daily 3X and 2X leverage  Utilize bull and bear funds for both sides of the trade.  Trade through rapidly changing markets  Direxion leveraged ETFs have provided investors with several options based on investor tastes and preferences.   The firm provides Daily Bull and Bear 3X ETFs   These ETFs provide a daily 3X leverage to whatever the investor invests to boost the returns.   These ETFs include sectoral ETFs, which may focus on aerospace, Internet, Financials, etc. The company also offers fixed-income ETFs with a 3X leverage which may follow the bull or the bear trend.  Market Cap-based ETFs are also on offer, which may track large, mid, and small-cap stocks on the exchange. A leverage-based approach is also available in this arena.   Worldwide exposure can be achieved by investing in various ETFs which invest in emerging markets like China and Mexico. The firm also offers a variety of MSCI-based ETFs.   A 1X and 2X leveraged ETF choice is also available.   Some examples of such funds are  Aerospace & Defense Bull 3X Shares,   Financial Bear 3X Shares,   20+ Year Treasury Bull 3X Shares,   Small-Cap Bear 3X Shares,   MSCI Mexico Bull 3X Shares,   5G Communications Bull 2X Shares,   CSI 300 China A Share Bear 1X Shares.  Along with ETFs, Direxion also provides mutual funds to investors. These are either actively managed or passively managed.   Examples of some mutual funds offered by the company  Hilton Tactical Income Fund, Monthly 7-10 Year Treasury Bear 2X Fund, Monthly NASDAQ-100 Bull 1.25X Fund, etc., are According to the company, 'Our role is to complement your core investment strategies, not replace them. Our funds allow you to seek opportunities in all market conditions, offering new solutions to challenge old standards. At Direxion, we are focused on your success.   We continuously strive to provide you with innovative products, consistent performance, and on-the-ground support to help you take advantage of opportunities, execute your strategies, deliver for your clients, and grow your business—regardless of market conditions.'   Thus, Direxion leveraged ETFs need to be taken care of while investing in the ETF world or even the mutual fund world. FAQs What is Direxion ETFs? Potomac Funds, a mutual fund provider, was created by Direxion in 1997. The name came from the Potomac River, close to the company's first location in Alexandria, Virginia.   What is an ETF? An ETF stands for exchange-traded fund (ETF). One single ETF is a basket of securities that can be bought and sold like mutual funds through a brokerage firm. ETFs track a specific index such as S&P, sector, commodity, or other assets. Much like stocks, ETFs can be traded on the market. Is an ETF better than a stock? Investing in an ETF is less risky than investing in a stock, as ETFs are diversified. In the case of ETFs, investors do not control what happens to the portions of the ETFs. ETFs have a diversified profile of assets, and the risk associated with the investment reduces significantly. In stocks, the risk attached is higher as the stock price depends entirely upon the company’s performance and other exogenous factors of the world.    Consult an expert advisor to discuss the right plan for you TALK TO AN EXPERT