On 22 November, Horizons ETF Management Inc. has filed for a new exchange-traded fund (ETF) with the US Securities and the Exchange Commision (SEC).
As per the SEC filing, Horizon Blockchain Index will invest at least 80 percent of the firm’s total assets in the common stock of the companies which are included in the fund. It will also invest in the US and foreign equity securities, and in the firms which will participate in the integration of the new blockchain technology.
The filled report stated: “The Horizons Blockchain Index is a proprietary Index that primarily invests in U.S. and foreign equity securities and seeks to invest in companies that stand to benefit from the growth of blockchain technology…The Fund will invest at least 80% of its total assets in the common stock of the companies included in the Index.”
An exchange-traded fund or ETF is a security that tracks an index, a commodity, bonds, or a basket of assets. But unlike a mutual fund, ETFs can be traded like a common stock on the exchange. As a result, ETFs have higher daily liquidity and lower fees which makes them very attractive to the individual traders.
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Horizons ETF management is planning to track the listed index using a ‘replication strategy’, which means that it will invest in stocks in the index in proportion to its weight. As per the strategy, the firm is also hoping to take profit from the performance of blockchain based companies.
In early November two other firms, Reality Shares Advisor and Amplify Trust ETF, filed with the SEC for permission to trade and invest in the blockchain startups.
Earlier this year in March, SEC rejected the Winklevoss twins‘ proposal to create Bitcoin ETF application.
Horizons ETF Management (Canada), in April this year, also launched world’s first marijuana-focused ETF.
Meanwhile, the US market is attracting the attention of a lot of blockchain firms. Recently bitFlyer USA, a subsidiary of the leading Japanese Bitcoin exchange bitFlyer, launched its operations in the states after obtaining BitLicense provided by the New York State Department of Financial Services.