In Brief:
- Purpose Investment launches two ETFs with monthly yield.
- The ETFs are listed on the Toronto Stock Exchange under the ticker of BTCY.B and ETHY.B.
- The company takes 1.10% management fees and annual yield is expected between 8 % and 10%.
Canada-based asset management firm, Purpose Investment launched Bitcoin and Ethereum tracking exchange-traded funds (ETFs), which will give the monthly payout to investors. Before this, The investment firm has also issued the first ETF in North America.
The company has listed these two Canadian-dollar-denominated ETF non-currency hedged units of the ETFs on the Toronto Stock Exchange under the ticker of BTCY.B and ETHY.B.
These newly launched Bitcoin and Ethereum tracking ETFs give monthly yield to investors, which is the first of its kind in the crypto space. The company has done this through a derivatives-based covered call strategy.
The company stated that it does not provide a full guarantee because of crypto-asset volatility. However, the annual yield is expected between 8 % and 10% for both ETFs. The company charges 1.10% management fees.
Vlad Tasevski, chief operating officer and head of product at Purpose Investments, says investors could consider these ETFs as asset classes independent from crypto markets. Also, Company affirmed that the capital loss will be smaller and less volatile.
“They should also consider if they want to earn yield while they hold them. Covered call options allow investors to generate additional short-term income on an asset they believe has long-term potential,” he said in an interview.
“Given the connection between the volatility of the underlying asset and premiums, covered call strategies on cryptocurrencies offer unique exposure to a unique asset class, providing investors a high yield without sacrificing significant price participation.”
Crypto space is expanding its area and Canada is the country where many ETFs are rolling out. Previously, Cathie Wood, CEO of Ark Investment Management, has allocated a fund to invest in Canadian Bitcoin ETFs as she wants to give exposure to digital assets.
