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[06/27/23] Funds Debut on Both Ends of the Risk Spectrum
WEEKLY ROUNDUP OF ETF FILINGS, LAUNCHES & CLOSURES
ETF issuers this week were at opposite extremes of risk, with firms looking to launch spot bitcoin ETFs and roll out two separate ultra-short-term Treasury ETFs.
On the risky end of things were the multiple companies following BlackRock Inc. in filing for spot bitcoin ETFs. While this type of ETF has never been approved, and has been rejected many times by the Securities and Exchange Commission, another fund’s approval may signal a change.
On Friday, Volatility Shares, best known for its leveraged VIX ETFs, received SEC approval for its 2x Bitcoin Strategy ETF (BITX), which starts trading on June 27. This fund compounds the already highly volatile nature of crypto prices by offering 2x leveraged exposure to the digital asset’s daily price movements.
“The approval of BITX may indicate the SEC is beginning to soften their overall stance on crypto-related ETFs. That could bode well for the prospects of spot bitcoin ETFs moving forward,” said Nate Geraci, president of The ETF Store.
On the safer side of things, both thematic ETF purveyor Global X ETFs and bond fund giant Pimco launched ultra-short Treasury bill ETFs. Due to rising rates, Treasuries with zero- to six-month maturities are yielding over 5%, longer even than longer-term bonds. These assets are close to cash in terms of liquidity and safety, but now have a positive yield, unlike for most of the last decade, when yields were basically zero.
If you’re interested in another ultra-short-term bond ETF, the?iShares 0-3 Month Treasury Bond ETF (SGOV)?is the cheapest fund in the category, with an expense ratio of 0.5% and over $1 billion in assets.
Below is a roundup of the key developments in the ETF industry during the week ending June 23, 2023:
Regulator gives nod to leveraged product while investors await ruling on spot bitcoin fund.
Invesco, WisdomTree, Bitwise quickly filed for spot price funds as floodgates open.
The fund launches at an ideal time for short-duration Treasuries.
The issuer’s new funds started trading on Thursday.
More firms file for spot bitcoin exchange-traded funds.
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