Blockchain ETF launches on London Stock Exchange

US-based investment management firm Invesco is launching a blockchain exchange-traded fund (ETF) on the London Stock Exchange (LSE).

Announced today, the Invesco Elwood Global Blockchain UCITS ETF has been developed in partnership with London-based investment firm Elwood Asset Management, which specialises in providing institutional investors with exposure to digital assets an blockchain technology. The ETF is designed to “target companies with potential to generate real earnings from blockchain technology”.

“Blockchain has been around for a decade, but many people still see it just as the technology behind cryptocurrencies,” Elwood’s chief executive officer Bin Ren said in a press release. “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.”

The ETF will track the Elwood Blockchain Global Equity Index by physically investing in its constituents. The index tracks companies in developed and emerging markets that are involved or have the potential to participate in the blockchain ecosystem.

Currently, 46% of the index is allocated to information technology, 23% to financials, 9% to communication services and 8% in both of the materials and consumer discretionary sectors. In terms of geographical allocations, the instrument focuses mainly on the United States (39%), Japan (29%) and Taiwan (12%).

The index was also designed to evolve with the potential growth of the blockchain sector, Elwood explained, adding that the instrument was reviewed and rebalanced on a quarterly basis. It is calculated for Elwood by Solactive AG, an index provider with expertise in tailor-made indices.