A New ETF Combines Blockchain, Cloud And Other Technologies

AdvisorShares, one of the largest issuers of actively managed exchange traded funds, is adding to its lineup with the debut of the AdvisorShares Sabretooth ETF BKCH.

The new ETF will invest in companies with exposure to blockchain and cloud computing, two of the fastest-growing corners of the technology sector.

What Happened

BKCH's investment thesis “holds that companies utilizing cloud computing and digital companies that implement emerging technology like blockchain may realize increased profitability and appreciation in stock prices over an extended time horizon,” according to AdvisorShares.

The new ETF is sub-advised by Sabretooth Advisors. Sabretooth Advisors and AdvisorShares also partner on the AdvisorShares New Tech and Media ETF FNG, an actively managed fund that holds shares of FANG stocks and related companies.

Why It's Important

While BKCH will have exposure to purveyors and users of blockchain technologies, the new ETF will not have any direct cryptocurrency investments.

Blockchain “innovation can potentially bring immediate impacts in the financial and technology sectors as well as future growth opportunities in healthcare and other sectors,” according to AdvisorShares.

While cloud computing is one of the fastest-growing segments in the broader technology sector, to date, just one ETF is dedicated to that theme. Regarding the new BKCH, that ETF beat another planned cloud ETF to market.

“Cloud computing has helped fuel a technological expansion by enhancing global accessibility and unveiling new ways to grow businesses, which has led to other advancements that seek to improve efficiency and security,” according to AdvisorShares.

What's Next

BKCH is a concentrated, high conviction portfolios. While holdings data for the new ETF is not available as of this writing, it's likely the new ETF's roster will not be massive. Using FNG as a possible barometer, that ETF has just 22 holdings.

Year-to-date, the only cloud computing ETF on the market is up almost 13 percent while the largest blockchain ETF is higher by more than 14%.

BKCH charges 0.85 percent per year, or $85 on a $10,000 investment.

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