April 27, 2021 5 min read

This story originally appeared on StockNews

Blockchain technology applications go way beyond cryptocurrency. With the potential to disrupt capital markets, cloud computing, and the clean energy industries, blockchain is expected to lead to technological innovations in the coming months. As a result, blockchain ETFs Siren Nasdaq NexGen Economy (BLCN) and First Trust Indxx Innovative Transaction & Process (LEGR) are expected to generate solid returns this year. Let’s take a closer look at these funds.

Blockchain technology, which was originally developed to make it easier to store and transfer cryptocurrencies, is revolutionizing virtually every industry. The decentralized database structure is widespread in the banking and financial services industry and is viewed as pioneering in the real estate, advertising and cloud computing industries. Cryptocurrencies are becoming increasingly accepted as a medium of exchange around the world, and several billion dollar companies are now accepting payments in bitcoins.

The increasing popularity of non-fungible tokens (NFTs) is also contributing to the growth of decentralized technology. NFTs are digital assets that represent a wide range of unique tangible and intangible items, from collectible sports cards to virtual real estate to digital sneakers. The global blockchain technology market is projected to grow 43% over the next six years, reaching $ 30.70 billion by 2027.

As companies focus on innovating to increase profitability after pandemic-induced losses, companies developing blockchain technology are expected to see significant spikes in demand in the short term. With that in mind, blockchain ETFs like Siren Nasdaq NexGen Economy ETF (BLCN) and First Trust Indxx Innovative Transaction & Process ETF (LEGR) believe they should now prove to be smart investment bets.

Sirene Nasdaq NexGen Economy ETF (BLCN)

BLCN invests in some of the largest blockchain development companies in the world. The passively managed ETF precisely tracks the Siren NASDAQ Blockchain Economy Index. BLCN issues blockchain scores to companies in this industry based on their material research and development resources to expand the use of blockchain technology. The ETF invests in the top 50-100 companies with the highest scores, with the companies with the highest scores receiving a higher weighting.

With $ 316 million in assets under management (AUM), BCLN’s top positions include SAP SE Sponsored ADR (SAP), International Business Machines Corporation (IBM) and Galaxy Digital Holdings Limited (GLXY). The fund has a turnover rate of 18.39%.

BLCN has an MSCI ESG Fund Rating of “A”, which indicates strong management and an appropriate commitment to social and environmental responsibility. The ETF is in the 85th percentile of all funds rated by the MSCI ESG Fund.

BLCN has a 0.68% expense ratio of 0.68%, which is above the category average of 0.5%. The ETF is up 109.5% last year and 19.4% since the start of the year. It pays dividends of $ 0.13 annually, which is a return of 0.26% from the current price. BLCN’s average dividend yield for four years is 0.89%.

BLCN’s POWR ratings reflect this promising outlook. It has an overall rating of B, which means “Buy” in our proprietary rating system. It has an A for Trade Grade and a B for Buy & Hold Grade. Of the 110 ETFs in the B-rated Technology Equities ETFs group, BLCN ranks 65th.

First Trust Indxx Innovative Transaction & Process ETF (LEGR)

LEGR invests in companies that operate as Active Users, Active Enablers or Active Explorers in blockchain technology. It is an equally weighted index that includes companies that have significant exposure to blockchain technology. LEGR was founded in 2018 and precisely tracks the Indxx Blockchain Index and invests in large-cap blended stocks.

LEGR has an AUM of $ 89.70 million. The main holdings are NVIDIA Corporation (NVDA), IBM and Oracle Corporation (ORCL). LEGR has a turnover rate of 25%. The ETF has an MSCI ESG Fund Rating (AA), which represents solid management and focuses on social and environmental issues. LEGR ranks 97.18 percentiles in its peer group and 94.77 global percentile rank in the comprehensive group, which includes all ETFs rated by the MSCI ESG Fund.

LEGR has an expense ratio of 0.65%, which is above the category average of 0.5%. It pays out $ 0.35 annually in dividends, which equates to a yield of 0.85% based on the prevailing share price. LEGR’s four-year average dividend yield is 1.27%. The ETF has gained 57.7% last year and 10.8% since the beginning of the year.

It’s no surprise that LEGR has an overall rating of A, which equates to a strong buy on our proprietary POWR rating system. It has an A for Trade Grade, Buy & Hold Grade, and Peer Grade. LEGR ranks 36th in the group of Technology Equities ETFs.

BLCN shares were trading at $ 48.75 per share Tuesday morning, up $ 0.09, up 0.18%. Since the beginning of the year, BLCN has gained 19.72%, while the benchmark index S&P 500 gained 11.94% over the same period.

About the author: Aditi Ganguly

Aditi is a seasoned content developer and financial writer who is passionate about helping investors understand the pros and cons of investing. She has a keen interest in the stock market and a fundamental approach to analyzing stocks.


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