We’re teaming up with our partners to bring you more insights into the innovative indices offered in our Marketplace. The Global X Digital Asset Index suite provides foundational exposure to the Mega-, Large-, and Mid-Cap segments of the digital asset market. These index models are diversified, efficient, and transparent. The suite of index models provides an optimal solution for investors seeking to gain exposure to this disruptive asset class and diversify their portfolios by allocating across different digital asset market segments.
What market conditions and investor needs drove the creation of this model?
In today’s rapidly evolving financial landscape, investors are increasingly weighing how digital assets can benefit their portfolios, given their unique characteristics. This emerging asset class can provide access to an innovative and dynamic market with high growth potential, driven by the increasing adoption of blockchain technology, digital currencies, and decentralized applications. Furthermore, digital assets have shown a low correlation to traditional asset classes like stocks and bonds, which may enhance diversification and potentially improve risk-adjusted returns.
Given the recent market volatility, investors may be taking a “back-to-basics” approach to digital assets by focusing on established or foundational networks such as Bitcoin, Ethereum, and other leading digital asset projects. These networks, Bitcoin and Ethereum in particular, have continued to maintain healthy development and network activity. Global X has launched these index models for investors seeking to gain foundational exposure to this emerging asset class.
What is the thesis behind these models? What currencies are included, and what sets them apart?
The Global X Digital Asset suite includes Mega-cap, Large-cap, and Mid-Cap Index models. The indices are market capitalization-weighted and may include exposure to the major segments of the digital asset market consisting of, but not limited to, digital payments, smart contract networks, decentralized financial (DeFi) applications, and scaling solutions. The indices are rules-based, passively managed strategies and rebalanced monthly.
The Global X Digital Asset Mega-Cap Index is designed to track the performance of an equally weighted basket of digital assets representing the mega-cap segment of the digital asset market. The index is comprised of the two largest digital assets by market capitalization.
The Global X Digital Asset Large-Cap Index is designed to track the performance of a diversified basket of digital assets representing the large-cap segment of the digital asset market. The index is comprised of the five largest digital assets by market capitalization. The weights are proportional to market capitalization, capped at 40% to promote diversification.
The Global X Digital Asset Mid-Cap Index is designed to track the performance of a diversified basket of digital assets representing the mid-cap segment of the digital asset market. The index comprises the ten largest digital assets by market capitalization, excluding the two largest digital assets. The weights are proportional to market capitalization, capped at 40% to promote diversification.
“Despite an extended period of challenging performance, the pace of development across the digital asset landscape has never been faster or more exciting. From bourgeoning on-chain ecosystems across Ethereum’s Layer 2 scaling solutions to once unthinkable advancements in bleeding-edge zero-knowledge technology to exponential improvements in user interfaces, blockchain networks are becoming more vibrant and seeing their disruptive potential grow by the day. With a handful of potential market catalysts on the horizon, such as the bitcoin halving, the main net launch of Coinbase’s Ethereum Layer 2 network “Base,” and a potential easing of U.S. monetary policy over the next year, the investment opportunity in digital assets remains highly compelling.”Erik Anderson, Lead Digital Asset Research Analyst
“As the digital asset and crypto markets mature, investors are increasingly seeking ways to gain exposure for their clients. The Separately Managed Account (SMA) provides a familiar investment vehicle that offers direct token exposure within an established investment wrapper. Investors are also looking for trusted names with a proven track record in disruptive technology, and Global X is a leading firm in this space. With our expertise in innovative solutions, we are thrilled to offer investors a managed account solution that seamlessly integrates into their existing business, enabling them to better serve and manage their clients.”John Stec, Director of Digital Asset Solutions
“We believe digital assets and blockchain are transformative technologies which will see increased adoption in the coming years. We designed these foundational strategies to provide investors with easy, diversified access to this emerging ecosystem.”Adam Sze, Head of Digital Asset Products
What do you predict for digital markets in the year ahead?
The growth of blockchain technology and digital assets has been nothing short of remarkable in recent years, fueled by a combination of technological innovation, increasing mainstream adoption, and a growing appetite for decentralized solutions. As a potentially transformative technology, blockchain has redefined the way we conceive of trust, security, and transparency in digital transactions with its decentralized and tamper-resistant architecture. This has spurred the development of a diverse array of applications across various industries, such as finance, supply chain management, healthcare, and real estate, generating use cases that extend well beyond digital payments. The digital asset ecosystem has evolved in tandem, expanding to encompass not only networks like Bitcoin and Ethereum but also utility tokens, security tokens, stablecoins, and non-fungible tokens (NFTs), each offering unique value propositions and investment opportunities. As the market continues to evolve and regulatory frameworks adapt, blockchain technology and digital assets have the potential to become increasingly influential components of the global economy, presenting a wealth of opportunities for investors and innovators alike.
We believe that this trend of increased adoption of blockchain technology and digital assets will continue in the coming years. Global X launched these index models for investors seeking to gain foundational exposure to this disruptive asset class.
More about Global X
Global X ETFs was founded in 2008. For more than a decade, our mission has been empowering investors with unexplored and intelligent solutions. Our product lineup features over 100 ETF strategies and over $38 billion in assets under management. While we are widely recognized for our Thematic Growth, Income, Commodity, and International Access ETFs, we also offer Core, Risk Management, Digital Asset, and other solutions to suit a range of investment objectives. Explore our ETFs, research and insights, and more at www.globalxetfs.com.
Global X is a member of Mirae Asset Financial Group, a global leader in financial services, with more than $480 billion in assets under management worldwide. Mirae Asset has an extensive global ETF platform ranging across the U.S., Brazil, Canada, Colombia, Europe, Hong Kong, India, Japan, Korea, and Vietnam, with over $80 billion in assets under management.
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely that of Global X and do not express the views or opinions of Blockforce Capital or Onramp Invest.