ETFs trade in Canada, the United States and other countries since a long time. They have achieved great success with large volumes of trades in their short time in existence. These ETFs do not offer dividends, however. Canada’s first asset management firm has made history by offering a monthly income to investors in an ETF.
Moving towards the Future
Purpose Investment made waves in February with the creation of the first North American ETF which tracks Bitcoin’s price. The investment company has taken another step in launching an ETF with monthly returns to investors. Canada now leads the way in crypto ETFs.
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Investors will receive monthly returns using the derivatives-based covered calls strategy of the Bitcoin and Ethereum ETF. The strategy, which is similar to the ETFs in crypto markets, marks another breakthrough.
ETFs’ annual yields are also considered attractive, according to market estimates. According to market experts, while it is impossible to know what monthly yield will be, analysts expect that the annual yield would equal 8%-10%, with the management fee of 1.10% going directly to the firm.
Source: BTCUSD at TradingView.com| Source: BTCUSD on TradingView.com
Canada leads the ETFs market ahead of the U.S. and has already approved Ethereum ETFs, while the U.S. is yet to approve their first Ethereum ETF. Purpose investment will offer both Bitcoin and Ethereum ETFs. Both are income-producing and classified in non-registered accounts.
ETFs making waves
ETFs allow investors to be exposed to cryptocurrency without needing to invest in any assets. With the approval of the ProShares Bitcoin Futures ETF in America, there was much anticipation. The first ever Bitcoin ETF saw more than $1 billion in trading volume within the first 24 hours.
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ETFs do not protect investors from market volatility. Investors are protected to some extent from fluctuations in the Purpose-Investment ETFs. While they will see monthly returns, investors will not experience the same capital gains as those who don’t.
“Given the connection between the volatility of the underlying asset and premiums, covered call strategies on cryptocurrencies offer unique exposure to a unique asset class, providing investors a high yield without sacrificing significant price participation.” – Vlad Taveski, COO & Head Of Product, Purpose Investments
Tasevki told “Yahoo Finance Canada” that investors are allowed to choose if they wish to earn these monthly yields on their investors. Covered calls are a method to make short-term money by investing in assets that they believe in.
Featured image taken from Investment U chart by TradingView.com