AdvisorShares Sabretooth ETF Being Launched
Two American companies have joined hands to launch a new exchange traded fund (ETF) that will track technology companies, including cloud computing and Blockchain based firms.
What are ETFs?
An ETF is a marketable security that is used to track an index, bonds, commodities or a basket of assets and are traded like shares. The advantage of an ETF is that it provides the same profits to investors as major markets would. Because of this, individual investors can avoid having to pay fund managers for their investment portfolios.
ETFs track multiple assets that are proportionately represented in the fund’s shares, which allows investors to short markets or even gain leverage.
ETF Focusing on Tech Companies
Investment management company AdvisorShares and investments advisory firm Sabretooth will work together to launch the new AdvisorShares Sabretooth ETF, which is scheduled to hit the markets on February 7. The ETF will carry the ticker BKCH.
The thought behind launching this type of an ETF is that companies that are using cloud computing or are involved in nascent technologies such as Blockchain would reach higher profitability and see increases in their share prices within a reasonable period of time.
Added to that, the AdvisorShares Sabretooth ETF has the potential to offer a much more durable investment opportunity for growth in equities as well as long term performance. In fact, many people are of the opinion that the creation of Blockchain ETFs is a sign that the markets are maturing.
ETFs on the Rise
In February last year, regulators in Canada approved the country’s first ever Blockchain-based ETF, which was targeted at both small- as well as large-scale Blockchain based corporations.
By the time the approvals came through, the organization that issued the ETF, Harvest Portfolios, had already developed the Harvest Blockchain Technologies Index. This index has been designed to follow the performance of ETF issuers in both large-cap Blockchain segments as well as emerging Blockchain sectors.
In the United States, things have not moved as quickly. While many companies have applied for ETFs based on cryptocurrencies and Blockchain, none have yet been approved.
For example, the CBOE (Chicago Board Options Exchange) teamed up with investment firm VanEck Associates and the financial services firm SolidX to apply for a rule change with the US SEC (Securities and Exchange Commission) so that Bitcoin ETFs could be listed on CBOE’s exchange.
However, the SEC has been delaying the process by pushing back its decision multiple times. In January, the companies re-applied for the ETF and are currently awaiting a decision from the SEC.