Blockchain exchange-traded funds (ETFs) own stocks in companies that have business operations in blockchain technology or in some way profit from it. Blockchain is made up of complex blocks of digital information and increasingly is used in banking, investing, cryptocurrency, and other sectors. While blockchain is a relatively new technology, many of the companies that operate in the space are well established. Some examples include International Business Machines Corp. (IBM), Oracle Corp. (ORCL), and Visa Inc. (V).
Many investors may be wary of risking an investment in blockchain due to the technology’s association with the volatile cryptocurrency market. However, blockchain is not the same thing as cryptocurrency, and blockchain ETFs invest only in stocks of regulated companies, many of which are big blue-chip technology firms, and not in cryptocurrency directly.
These three ETFs, ranked by one-year trailing total return, are BLOK, BLCN, and LEGR.
The top holdings of these ETFs are class A shares of MicroStrategy Inc., class A shares of Coinbase Global Inc., and Nvidia Corp., respectively.
There are three blockchain ETFs that trade in the U.S., excluding inverse and leveraged ETFs as well as funds with less than $50 million in assets under management (AUM). This list excludes the Bitwise Crypto Industry Innovators ETF (BITQ), which launched in May 2021 and does not have enough trading history to be included in our rankings.
The three blockchain ETFs have outperformed the broader market over the past 12 months, posting higher total returns than the S&P 500’s total return of 34.0%, as of Aug. 10, 2021. The best-performing blockchain ETF for Q4 2021, based on performance over the past year, is the Amplify Transformational Data Sharing ETF (BLOK). We examine the three blockchain ETFs below. All numbers are as of Aug. 10, 2021.
Performance over One-Year: 112.9%
Expense Ratio: 0.71%
Annual Dividend Yield: 1.30%
Three-Month Average Daily Volume: 448,406
Assets Under Management: $1.2 billion
Inception Date: Jan. 16, 2018
Issuer: Amplify Investments
BLOK is an actively managed ETF that invests a minimum of 80% of its net assets in stocks of companies engaged in the development and utilization of blockchain technologies. It follows a blended strategy, investing in a mix of value and growth stocks of various market capitalizations across the world, and is comprised mostly of companies operating within the software & services and diversified financials industries.
The fund’s top three holdings are class A shares of MicroStrategy Inc. (MSTR), a provider of enterprise software platforms; class A shares of Square Inc. (SQ), a financial services and digital payments company; and Hut 8 Mining Corp. (HUT:TSE), a Canada-based bitcoin mining and blockchain infrastructure company.
Performance over One-Year: 38.9%
Expense Ratio: 0.68%
Annual Dividend Yield: 0.63%
Three-Month Average Daily Volume: 55,737
Assets Under Management: $289.1 million
Inception Date: Jan. 17, 2018
Issuer: SRN Advisors
BLCN tracks the Nasdaq Blockchain Economy Index, which gauges the performance of companies involved in developing, researching, supporting, innovating, or utilizing blockchain technology. The ETF follows a blended strategy, investing in growth and value stocks, and its top three holdings are class A shares of Coinbase Global Inc. (COIN), the operator of a cryptocurrency exchange platform; class A shares of Square Inc.; and class A shares of MicroStrategy Inc.
Performance over One-Year: 36.4%
Expense Ratio: 0.65%
Annual Dividend Yield: 1.12%
Three-Month Average Daily Volume: 18,962
Assets Under Management: $117.8 million
Inception Date: Jan. 24, 2018
Issuer: First Trust
LEGR tracks the Indxx Blockchain Index, which gauges the performance of companies that either actively utilize, invest in, develop, or have products that are positioned to benefit from blockchain technology. The ETF normally invests a minimum of 90% of its net assets in equity securities that comprise the index and has a total of 100 holdings, excluding cash, most of which operate in the information technology and financial industries.
LEGR’s top three holdings include Nvidia Corp. (NVDA), a graphics processing unit manufacturer; Oracle Corp., a multinational computer technology company; and Advanced Micro Devices Inc. (AMD), a semiconductor manufacturer.
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