Start-up launches Australia’s first index-style crypto fund
Fintech start-up CoinJar has announced the launch of its first index-style cryptocurrency fund, the CoinJar Digital Currency Fund, which will offer investors exposure to digital currencies without holding and trading the assets themselves.
The fund would consist of two classes: a bitcoin class providing exposure to bitcoin (BTC) only and a mixed class which would track the performance of four digital currencies such as bitcoin (BTC), ethereum (ETH), ripple (XRP) and Litecoin (LTC).
The fund would have no establishment costs, contribution fees or performance fees, the company said, while its management fees were expected to stand at 1.3 per cent per annum for bitcoin class and 1.8 per cent per annum for mixed class plus normal operating costs.
The release of the fund followed the earlier launch of CoinJar exchange, an Australian cryptocurrency trading exchange.
CoinJar’s head of institutional, Jordan Michaelides, said the fund would aim to help prevent investors from being exposed to potential loss through cybercrime as it would handle the custody risk.
He also noted that although the cryptocurrency experienced “remarkable swings in price and extreme volatility” over the last two years, it was still in a position to provide investors with exceptional gains compared to other asset classes.
“The fund is unlocking an easier interface for wholesale investors to access a burgeoning and new asset class, which to date has been largely unavailable in familiar investment structures like unit trusts,” Michaelides said.
“Historically, digital currencies have provided alternative sources of capital growth with low correlations with traditional asset classes such as equities and fixed income.”
AUTHOR
Oksana Patron
Recommended for you
Sydney-based alternative fund manager East Coast Capital Management has formed its first advisory council as it enters its next phase of growth.
With 40 per cent of advice practices looking to increase their ETF usage, the next frontier being embraced is smart beta ETFs with flows doubling in July, providers have said.
Australian ETFs saw flows of $5.8 billion in July, more than double the previous month, and adviser adoption is tipped to help total flows reach $50 billion by the end of the year.
Pinnacle’s London affiliate, Life Cycle Investment Partners, has secured over $15 billion in FUM in its first year and achieved profitability, the firm’s fastest affiliate to do so.
