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CoinShares introduces two zero management fee index ETPs

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CoinShares has announced the addition of two physically-backed Index ETPs to their growing range of crypto ETPs listed on Germany’s main market Xetra.

The Issuer formally announced on March 27, 2023 a reduction in the management fees to 0.0 per cent p.a. for both the CoinShares Physical Top 10 Crypto Market ETP (Ticker: CTEN) and CoinShares Physical Smart Contract Platform ETP (Ticker: CSSC). Both products track bespoke indices developed in partnership with Compass Financial Technologies. 

Frank Spiteri, CoinShares’ Head of Asset Management, says: “We are excited to unveil our two innovative new Index ETPs to the market today, both of which have had their management fees reduced to 0.0 per cent p.a. With CTEN, investors can gain wider market exposure with reduced concentration risk compared to single coins, whilst CSSC offers investors passive exposure to the Web3 revolution in a single diversified, regulated, transparent product.”

CTEN and CSSC were developed to meet demand in the market for Index ETPs that accurately capture trends in the digital asset universe and maximise risk-adjusted performance in the most cost-efficient manner possible. 

CoinShares reports that equally-weighted indices usually require a larger number of constituents to outperform their market-cap weighted counterparts, which directly conflicts with the eligible coin restraints imposed by most major European exchanges, and which can lead to higher portfolio turnover costs. 

The 35 per cent maximum weight seeks at reducing the concentration risk of the indices, which the firm believes is particularly relevant in a market still so heavily dominated by one asset: Bitcoin.

The quarterly rebalancing schedule and a maximum number of 10 constituents allows the products to stay up-to-date with changes in the cryptocurrency market without suffering from the high trading costs associated with more frequent rebalancing strategies. 

Guillaume Le Fur, Founding Partner, CEO at Compass Financial Technologies, says: “We are delighted to be extending our partnership with CoinShares with the development and launch of these two new crypto indices. These indices are a reflection of Compass’s continued commitment to innovation in the digital assets industry and we look forward to further collaboration with the CoinShares team in the future.”

Both Compass Financial Technologies and Xetra were winners in the recent ETF Express European Awards. 

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