Asset manager column: Blockchain – A new technology opens up great prospects | message

news-container">Blockchain technology is an umbrella term for a number of tools, methods and processes for electronic recording between multiple participants. The strength of blockchain technology is that a blockchain system, through a combination of cryptography, distributed consensus algorithms, and socio-economic incentive design, enables all participants to agree on the validity and order of the shared records without having to resort to a leave central authority.

It thus achieves a high level of security, confidentiality, and independence and is virtually forgery-proof. Today nobody can say exactly how the technology will develop in concrete terms. However, there is no doubt that technology will play an increasingly large part in the digital economy in the future. In my opinion, the situation is comparable to the development of the Internet in the 1990s. At that time, new companies, new applications, and new business fields emerged in a very short time. Even then, no one could see the importance of the Internet. Still, it was the perfect time to invest in internet companies.

Today, more and more companies and institutions are adopting blockchain as a future-proof technology. The applications are already diverse. Central banks and commercial banks are using the technology to make international payments and capital market transactions cheaper and more secure. In the shipping industry, more than 50 percent of global container traffic now runs on the blockchain. Great progress is being made in the energy market thanks to the transparency of technology. Solar systems can bill more efficiently, energy tracking is easier and certificates of origin can be issued more easily. An important step on the way to a “greener economy”.

For investors, it should be noted that companies that benefit from the rapidly growing applications offer excellent investment opportunities. How should an investor invest in this young industry?

The broadest possible diversification is advisable, since technological leaps continue to change the market quickly and innovation leaders change quickly. Invesco, as an innovative fund house, initiated the Invesco Elwood Global Blockchain ETF (WKN A2PA35) in 2019. This ETF invests in an index made up of global companies that participate in the entire ecosystem of blockchain technology. Quarterly adjustments to the index ensure that the ETF can track rapid changes, in industry and in companies, for the benefit of investors. Over 50 companies from all regions of the world are currently weighted in the ETF. This includes large companies such as Banco Santander, Rio Tinto and Square, but also new growth stars such as microstrategies or Canaan. With an expense ratio of 0.65 percent, the ETF is very inexpensive. The previous performance of 210 percent since it was launched shows the good long-term prospects. Due to the high fluctuations, investors should prefer staggered or regular purchases to a one-off investment. The industry ETF is also ideal for a long-term savings plan.

You can find this and other asset managers with their opinions and online investment strategies at https://www.v-check.de/?utm_source=finanzennet&utm_medium=ppc&utm_campaign=leuapress&utm_content=textlink

By Uwe Wiesner, asset manager at Hansen & Heinrich Aktiengesellschaft

More and more private investors in Germany rely on bank-independent asset managers for their investments. Free from product and sales interests, they can advise their clients in the best possible way. You can find more information at www.v-bank.com.

The above text reflects the opinion of the respective columnist. Finanzen.net GmbH assumes no responsibility for its correctness and excludes any right of recourse.

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