As technology advances, ETF investors can access targeted strategies to focus on new developing market sectors such as blockchain and autonomous vehicles.
For example, the Innovation Shares NextGen Protocol ETF (NYSEArca: KOIN) was the first ETF to incorporate an artificial intelligence-driven process to identify and invest in blockchain innovators and adopters.
KOIN tries to reflect the performance of the Innovation Labs Blockchain Innovators Index, which is comprised of companies that that use or are involved in the blockchain technology. The underlying Innovation Labs Blockchain Innovators Index has also been the best performing blockchain-related index year-to-date.
When American consumers think of blockchains, they would automatically tie it with bitcoins or cryptocurrencies. To be more precise, a blockchain is a decentralized database shared across all users that facilitates the process of recording transactions and tracking assets across a business network. The blockchain technology has many applications beyond cryptocurrencies. This foundational technology is expected to pave the way for significant disruptions across many industries.
Related: 4 Blockchain ETFs to Watch in Q2
The blockchain-related ETF currently includes a hefty 55.5% tilt toward the technology sector, but it is also exposed to other market segments like financial services 24.6%, industrials 7.6%, consumer cyclical 6.6% and energy 4.2%.
“Technology is the largest sector now but it could change as blockchain evolves,” Matt Markiewicz, Managing Director with Innovation Shares, told ETF Trends in a call.