Victory Capital Launches Crypto Index Fund

Fund manager with $160 billion AUM has filed to also offer the strategy in an ETF wrapper

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Mannik Dhillon, president of VictoryShares & Solutions

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key takeaways

  • Launch comes after Victory partnered with index provider Nasdaq and crypto investment firm Hashdex
  • Index that the fund tracks holds bitcoin and ethereum as well others including chainlink, litecoin and filecoin

Victory Capital has launched a private fund to offer qualified clients access to digital assets and has plans to broaden the strategy’s availability by offering it as an ETF.

The Texas-based company, which manages about $160 billion assets, has launched the Victory Hashdex Nasdaq Crypto Index Fund LLC, the firm announced Wednesday. The fund’s management fee is 175 basis points.

The offering tracks the Nasdaq Crypto Index, which holds multiple coins — a differentiator to competing offerings, Dhillon noted. As of June 1, the index held bitcoin and ethereum at weightings of about 62% and 32%, respectively, as well as smaller positions in litecoin, chainlink, bitcoin cash, uniswap, stellar lumens and filecoin.

“We have seen an evolution in crypto assets that is continuing, and we believe this is a viable asset class,” Mannik Dhillon, president of VictoryShares & Solutions, told Blockworks in an email. “Our private fund provides US accredited investors with the opportunity to gain broad-based exposure to crypto assets in a dynamic, adaptable way for a relatively low cost and without lockups.”

The launch comes after Victory announced plans to enter the cryptocurrency market through a partnership with Nasdaq and Hashdex. The latter firm, a Brazil-based asset manager founded in 2018, launched its own crypto ETF earlier this year using the same Nasdaq index. The product trades on the Bermuda Stock Exchange for accredited non-US investors.

Victory has filed an initial registration statement with the SEC to offer the strategy in an ETF vehicle, the firm also revealed Wednesday.

“We have always felt that if you build an institutional quality product you should try to bring it to as many investors as possible,” Dhillon said. “ETFs and their exchange-traded nature allow for more investors to easily access investment strategies, thereby further democratizing access to the asset class.”

ETFs that directly invest in crypto currently await approval by US regulators. SEC Chair Gary Gensler said Tuesday that he is looking forward in particular to the agency’s review of ETFs limited to bitcoin futures.

Dhillon noted that the dialogue around regulation and potential product approvals is great for investors. 

Further solidifying regulation of products and the crypto asset class in general will be a huge, positive evolutionary step for the industry — with regulation comes increased comfort and generally more demand from more investors embracing an asset class or investment,” he added. “As far as timing, only the SEC really knows, but we trust they will approach the topic objectively, methodically and with the attention and rigor it deserves.”

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