CoinShares has expanded its range of crypto exchange-traded products (ETPs) with the launch of two basket ETPs tracking large-cap and smart contract digital assets.
The CoinShares Physical Top 10 Crypto Market ETP (CTEN) and the CoinShares Physical Smart Contract Platform ETP (CSSC) are listed on the Deutsche Boerse with total expense ratios (TERs) of 0% “until further notice”.
CTEN and CSSC will track the CoinShares Compass Top10 Crypto Market index and the CoinShares Compass Smart Contract Platform index, respectively.
The launches come after the ETP issuer reported a 97% drop in income in 2022 following the collapse of the exchange FTX last November.
However, CoinShares said the new ETPs were developed to meet the demand for crypto index products.
CTEN and CSSC will both hold 10 cryptocurrencies and have a maximum weighting of 35% in a bid to “reduce the concentration risk of the indices” which will rebalance quarterly.
Despite this, CTEN currently has a 39.2% weighting to bitcoin, ahead of ethereum which has a weighting of 33.8% and 8.2% for ripple.
Meanwhile, CSSC has a 35.9% weighting to ethereum, ahead of cardano (14.7%) and polygon (11.9%).
CoinShares said the quarterly rebalancing will help keep the cost of the product low. It added equally-weighted indices usually “require a larger number of constituents to outperform” market-cap-weighted strategies and lead to higher portfolio turnover costs.
Frank Spiteri, head of asset management at CoinShares, said: “With CTEN, investors can gain wider market exposure with reduced concentration risk compared to single coins while CSSC offers investors passive exposure to the Web3 revolution in a single diversified, regulated, transparent product.”
CoinShares revealed a £26m loss following the collapse of FTX while asset management fees fell 66% in Q4 2022 as assets under management (AUM) fell significantly over the year.
The firm said it amended its approach to counterparty risk following the collapse of FTX, placing the “vast majority” of all digital assets with regulated digital asset custodians.
CoinShares closed its FTX ETP – the CoinShares FTX Physical FTX Token (CFTT) – last November.
Earlier this month, 21Shares announced it would be delisting its terra ETP and closing five others due to low investor demand.