The blockchain is perhaps best known as the technology behind cryptocurrencies like or . But as recent research shows, it is also gaining importance because of its much broader application possibilities. And that arouses the interest of investors.
the Researcher Karl Wust from ETH Zurich and Arthur Gervais from Imperial College London write:
“Blockchain as a technology has received a lot of attention beyond the purpose of financial transactions – distributed cloud storage, smart property, Internet of Things, supply chain management, healthcare, ownership and licensing, and decentralized autonomous organizations are among the possible applications.”
Analysts agree that blockchain technology is opening up new opportunities in many sectors.
MarketsandMarkets Research highlights:
“The global blockchain market is expected to grow from $ 3.0 billion in 2020 to $ 39.7 billion in 2025. That’s an impressive CAGR of 67.3 % between 2020 and 2025. “
As a result, companies that could provide access to financial technology, decentralized financial applications and the blockchain are increasingly in the spotlight.
For example, some investors examine stocks like Coinbase Global (NASDAQ :), PayPal (NASDAQ 🙂 or Square (NYSE 🙂 to determine if these could add to their long-term portfolios.
Many of these assets have made significant returns this year despite the recent sell-off of most cryptocurrencies.
These gains are substantial. For most retail investors, however, it is not that easy to cope with the short-term volatility of cryptocurrencies.
That’s why today we’re introducing two exchange-traded funds (ETFs) that may be of interest to investors looking to invest in companies that are pioneers in blockchain technology and digital assets, but without experiencing the roller coaster ride that cryptocurrencies have.
1st First Trust Indxx Innovative Transaction & Process ETF
- Current exchange rate: $ 43.35
- 52 week range: $ 30.06- $ 43.28
- Dividend yield: 1.12%
- Expense ratio: 0.65% per year
the First Trust Indxx Innovative Transaction & Process ETF (NASDAQ 🙂 provides access to blockchain technology companies that are either developing or actively using the technology.
LEGR forms the with 100 holdings Indxx blockchain Index. The fund went public in January 2018. About a third of the stocks come from the US, followed by companies based in China (10.87%), India (7.07%), Germany (6.80%) and France (6.22%).
Among the subsectors, information technology and finance have the greatest weight with 36.28% and 35.26% respectively. Communication services (8.21%) and cyclical consumer goods (7.51%) follow. The fund’s 10 largest positions account for less than 15% of net assets of $ 117.8 million. No share currently has a weighting of more than 1.90%.
The chip heavyweights are among the better-known stocks in the fund Nvidia (NASDAQ :), Advanced Micro Devices (NASDAQ 🙂 and Texas Instruments (NASDAQ :); the Indian IT group Wipro (NYSE :), the enterprise software provider Oracle (NYSE :), the technology giants International Business Machines (NYSE 🙂 and Microsoft (NASDAQ :), as well as telecommunications stocks such as Deutsche Telekom (DE 🙂 (OTC 🙂 and Swisscom (SIX 🙂 (OTC :).
Over the past year the fund is up 35% and has hit an all-time high in the past few days. Interested investors might consider a possible short-term decline towards the $ 40 mark as a better entry point. We like the diversification in this ETF.
2. Capital Link NextGen Protocol ETF
- Current exchange rate: $ 43.38
- 52 week range: $ 30.63- $ 43.96
- Dividend yield: 0.35%
- Expense ratio: 0.95% per year
the Capital Link NextGen Protocol ETF (NYSE 🙂 invests in fintech companies. Some of them are digital asset providers while others offer products or services that help other companies adopt related technologies.
The KOIN-ETF, which tracks the ATFI Global NextGen Fintech Index, currently holds 43 positions. The fund went public in January 2018. It’s a small, top-heavy fund, the 10 largest holdings of which account for 40% of net assets of $ 30.3 million.
As in the LEGR fund discussed above, Nvidia, Microsoft and Oracle are among the leading stocks. The fund also holds shares in Amazon (NASDAQ :), Visa (NYSE :), Mastercard (NYSE :: NYSE), Taiwan Semiconductor Manufacturing (NYSE :), Intel (NASDAQ 🙂 and Nestlé (OTC :)).
The fund is up around 34% over the past 12 months and has hit a record high in the past few days. A short-term decline towards the $ 40 mark would improve the margin of safety for long-term investors.
Despite recent price jumps at LEGR, KOIN, and other funds that focus on fintech and blockchain names, we believe the stocks in these ETFs will have the wind on their backs in the long run as well.