Blockchain Technologies ETF is the first of its kind

Morningstar Canada 7 February, 2018 | 6:00PM

Blockchain Technologies (symbol: HBLK), the first exchange-traded fund of its kind in Canada, opened for trading today on the Toronto Stock Exchange. It will invest in North American-listed companies that are involved directly or indirectly in the development and implementation of blockchain and distributed-ledger technologies.

Sponsored by Oakville, Ont.-based Harvest Portfolios Group Inc., the specialty ETF's rules-based strategy is based on an index created and managed by Harvest. A multi-factor ranking model is used to select the index constituents. They are a combination of large-cap companies with a minimum market capitalization of US$10 billion, and smaller, emerging companies with a minimum market cap of $50 million in Canadian dollars.

Initially, the index will consist of 10 large-cap companies and up to 50 emerging companies. The large-cap holdings will start off equally weighted and will be rebalanced quarterly.

The emerging-company holdings will be market-cap-weighted. These stocks initially have a combined weighting of 55% in the portfolio, but the index has been designed so that their weighting will increase over time.

According to the prospectus, the ETF will not have direct exposure to crypto-assets and/or crypto currencies such as bitcoin or initial coin offerings, nor to their relevant exchanges.

The management fee is 0.65%, not including expenses.

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Morningstar Canada

Morningstar Canada