A Fund of Fund invests in other schemes. Invesco’s blockchain fund is structured to invest in an Ireland-domiciled ETF (exchange traded fund), which bet on listed equities of companies in developed and emerging markets that participate in the blockchain ecosystem. The fund had got approval from markets regulator SEBI.
“From the developments of the last few days, Indian lawmakers have been meeting participants in the country’s digital assets industry, which will likely culminate in a new legislative framework being formulated,” said Invesco Mutual Fund in a release. “In light of the above, we believe it is important for investors to fully understand all aspects before making long term investment decisions.”
The fund launch had caught the attention of several investors, who perceived it to be a legitimate way to take exposure to cryptocurrency. Analysts said the scheme would have received huge subscriptions.
“There was a likelihood that the fund would have been perceived as a crypto fund even though it is not one, given the unusual craze around crypto currency at the moment. It’s a precautionary move by the fund house,” says Dhirendra Kumar, Founder, Value Research.
Sources said Invesco’s Blockchain Fund of Fund does not invest directly in cryptos. While Blockchain is widely associated with cryptocurrencies like bitcoins, it is not the same as crypto. Blockchain is the technology that enables the existence of cryptocurrency.
The investment universe of the fund consists of public global companies in developed and emerging markets that invests across the whole blockchain ecosystem. Blockchain is a network that allows companies and people to maintain and transfer information instantly. The technology is used in areas such as cryptocurrency mining hardware, technology operations, financial services and payment systems among others
Debate over whether cryptocurrencies should be allowed in India has been raging of late with Prime Minister Narendra Modi chairing a meeting last week to discuss the matter. Reserve Bank of India is against virtual currencies in the country with governor Shaktikanta Das saying cryptos pose a threat to the country’s economic stability.
