NFTs now have an ETF – NFTZ from Defiance ETFs. Let’s check it out.
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Introduction – What Are NFTs?
NFT stands for non-fungible token. NFTs allow for ownership of digital goods, as they are unique, verifiable tokens that exist on a blockchain. Blockchain is the digital database framework of cryptocurrencies like Bitcoin. Some of these words may sound foreign to you. They were to me too before writing this.
Basically, NFTs take things like digital artwork and create one-of-a-kind, verifiable assets. And some of these pieces of artwork have been selling for millions of dollars. An NFT can be made from an image, a tweet, a video clip, etc. No two NFTs are identical. NFTs can be bought, sold, and created on marketplaces, using cryptocurrency as payment.
So NFTs and blockchain and crypto are all the rave right now. And now there’s a single ETF to invest in them.
NFTZ from Defiance – The First NFT ETF
NFTZ is an ETF from Defiance that aims to capture companies heavily involved with NFTs, blockchain, and/or cryptocurrency. It is the first NFT-focused ETF in existence. It launched on December 1, 2021 and has amassed over $10 million in assets so far. NFTZ trades on the NYSE and has an expense ratio of 0.65%.
The fund seeks to track the BITA NFT and Blockchain Select index, a market cap weighted, passively managed, rules-based index. The fund’s 34 holdings include fintech firms, cyber security providers, and crypto miners, among others. Holdings are capped at 4%. Similar to some of the ETFs for crypto and blockchain, notable names include Cloudflare, Coinbase, Silvergate Capital, and HIVE.
Defiance suggest these reasons to invest in NFTZ, straight from their website:
- NFTs provide true digital ownership of unique virtual and physical items. Their scope is as broad as human creativity, unconstrained by the natural world.
- NFTZ is the first NFT ETF, offering simple and convenient access to a sometimes-high entry-level sector.
- NFTZ targets companies involved in NFTs, blockchain, and cryptocurrency ecosystems and communities. Together, these comprise aspects of an NFT marketplace set to take the world by storm.
- Blockchain supports trustless peer to peer exchanges with no third-party involvement. This has the potential to change how we live, do business, pursue leisure and even govern.
What do you think of NFTZ? Let me know in the comments.
Disclaimer: While I love diving into investing-related data and playing around with backtests, I am in no way a certified expert. I have no formal financial education. I am not a financial advisor, portfolio manager, or accountant. This is not financial advice, investing advice, or tax advice. The information on this website is for informational and recreational purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. Do your own due diligence. Past performance does not guarantee future returns. Read my lengthier disclaimer here.
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Do you think NFTs and NFTZ will be uncorrelated to stocks, bonds, gold, and crypto and will be good diversifies?
Because if so then I have to concede to my friends that NTFs can be (at least sometimes) a good investment.
John Williamson says
Too soon to tell. But uncorrelation alone does not make a good diversifier.