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BNY Mellon Blockchain Innovation Fund: a diversified approach to investing in blockchain

BNY Mellon Blockchain Innovation FundĀ 

The BNY Mellon Blockchain Innovation Fund aims to capitalise on growth in the blockchain space by targeting firms that are leveraging blockchain technology to either generate new revenue streams or reduce their cost structures by increasing their operational efficiency.

Blockchain Technology

It has been suggested that blockchain is one of the most disruptive technologies to evolve since the mainstream adoption of the internet. Blockchain is a digitally-distributed, tamperproof, ledger system. It is most famously associated with cryptocurrencies, however, applications of the technology extend across industries and sectors, potentially revolutionising the way firms conduct business.

The technology is increasingly being accepted by regulators across the world, furthering adoption across a range of industries and regions.

Current common use cases for blockchain technology are financial services, healthcare and supply chain management. However, it still remains in a relatively early stage, therefore investors could gain a competitive advantage by allocating funds to the industry.

Holdings

The top three holdings in the trust are: Grayscale Bitcoin Trust (5%), a vehicle that allows investors to invest in trusts that hold large amounts of Bitcoin; Square (4.6%), an American financial services and digital payments company, and; Silvergate Capital (4.1%), a provider of financial infrastructure solutions and services to participants in the digital currency industry.

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In terms of the sector breakdown, the BNY Mellon Blockchain Innovation Fund’s top three holdings are: capital markets (19.1%); IT Services (14.3%); and Software (9.7%).

While 73.8% of the companies in the fund are from the US, it does have a range of geographies represented, including South Korea (4%) and Germany (3.6%).

Performance

The fund has outperformed the the MSCI AC World NR Index benchmark over the past year. Between June 2020 and June 2021, the BNY Mellon Blockchain Innovation Fund added 59.44%

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