Canada approves first blockchain Exchange-Traded Fund (ETF)

The Ontario Securities Commission has approved Canada’s first blockchain exchange-traded fund. Harvest Portfolios, an independent Canadian investment management company, filed the preliminary paperwork for its Blockchain Technologies.

Harvest Portfolios will start offering investors to trade in blockchain technologies. This is after its approval by the Ontario Securities Commission. The fund has a management fee of 0.65 per cent. It will seek to replicate performance of the Harvest Blockchain Technologies Index. The index can track performance of issuers in large-cap blockchain segment and the emerging blockchain segment. These segments are those exposing to development and implementation of blockchain technologies in North America.

Harvest will act as a promoter, trustee, manager and portfolio manager of HBLK and its administration. This is according to a company  statement. 

“HBLK seeks to replicate, to the extent reasonably possible and before fees and expenses, the performance of the Harvest Blockchain Technologies Index. HBLK invests in equity securities of issuers exposed, directly or indirectly, to the development and implementation of blockchain and distributed ledger technologies”.

However the application was filed on January.

Additionally, two other companies based in Canada want to launch blockchain funds. They filed their prospects with regulators last week.

Beside Harvest, two other firms are in Que to launch ETFs; First Trust and Evolve Funds Group Inc. these firms have already proposed their preliminary prospectuses with Canadian regulators.

Karl Cheong, head of ETFs for First Trust Portfolios Canada, told

“Every conversation we are having with clients – regardless if we are talking about a Canadian equities product or a U.S. equity product – inevitably leads to (a discussion about) blockchain or bitcoin”.

He agrees that the blockchain concept is very attractive to investors right now. He further claims that research shows that blockchain could help industries or companies save billions of dollars in cost, making it very attractive.

However if approved, First Trust ETF will have a management fee of 0.80 per cent.

The other company is Evolve Funds Inc, which plans to launch an ETF known as LINK. However, it will be the first “actively manage” in Canada. The company said it will deal in issuers in the area of  research, development, or use of blockchain technologies. It will also deal in issuers in blockchain application supply chain including technology hardware.

Therefore, it will have a management fee of 0.75 per cent.

Raj Lala, president and chief executive officer of Evolve in a statement, said,

“Blockchain technology is poised to disrupt virtually every business and industry, including financial services, real estate, health care and government. Currently, at the base of every digital currency, many compare blockchain to the second coming of the Internet. I believe we are Canada’s first actively-managed blockchain ETF, which will allow us to be nimble and potentially capitalize on emerging opportunities”.

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David Kariuki is a journalist who has a wide range of experience reporting about modern technology solutions including cryptocurrencies. A graduate of Kenya's Moi University, he also writes for Hypergrid Business, Cryptomorrow, and Cleanleap, and has previously worked for Resources Quarterly and Construction Review magazines.

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