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State Street Global Advisors announced the launch of three new digital asset and “disruptive technology” exchange-traded funds (ETFs). These new ETFs will be managed by Galaxy Asset Management, a subsidiary of Mike Novogratz’s Galaxy Digital Holdings.
Introduction of New ETFs
According to the announcement from State Street, the new funds will be named SPDR Galaxy Digital Asset Ecosystem ETF (DECO), SPDR Galaxy Hedged Digital Asset Ecosystem ETF (HECO), and SPDR Galaxy Transformative Technology Accelerators ETF (TEKX). DECO aims to provide exposure to companies benefiting from the adoption of blockchain and digital asset industries as well as cryptocurrencies.
Volatility Management
While HECO aims for a similar purpose as DECO, it offers additional management by using covered call options and protective put options to manage volatility. These ETFs aim to provide investors with safer access to the digital asset market.
Disruptive Technologies
TEKX aims to provide exposure to companies supporting new disruptive technologies, including but not limited to blockchain and artificial intelligence (AI). Anna Paglia, Chief Investment Officer of State Street Global Advisors, stated that digital assets and blockchain technology have the potential to transform financial markets and the economy over the next decade.
Paglia expressed that some investors are uncomfortable with the short-term, volatile price movements of a single currency and, therefore, believe that launching actively managed digital asset portfolios with diversification advantages is the next evolution of this market.
As of the end of 2023, State Street manages $4.128 trillion in assets, with $1.27 trillion in ETFs.
The introduction of these new ETFs aims to provide investors with broader access to the digital asset market and to assess various opportunities in this field. The proposed diversification and volatility management strategies are designed to appeal to a wider investor base. This development highlights the potential impacts of digital assets and disruptive technologies on financial markets.
