TORONTO, August 18, 2021 – Evolve Funds Group Inc. (“Evolve” or “the Manager”) is pleased to announce that it has filed a preliminary prospectus with the Canadian securities regulators for the Evolve Cryptocurrencies ETF (“ETC” or “the Fund”). ETC is designed to provide investors with indirect exposure to certain cryptocurrencies selected by the Manager, weighted on a market capitalization basis and rebalanced monthly.
“Many investors are adding cryptocurrencies to their investment portfolios today,” says Raj Lala, President and CEO, Evolve ETFs. “The challenges they face include how to invest, and into which cryptocurrencies. Since the regulatory approvals earlier this year for our Bitcoin ETF, and our Ether ETF, investors can hold cryptocurrencies in their brokerage account including their RSP and TFSA. And now with the Evolve Cryptocurrencies ETF, investors will be able to take a broader approach by allocating to cryptocurrencies based on their market cap weightings. If and when Evolve has future cryptocurrency ETFs available, these may also be added at the manager’s discretion, making ETC a potential turnkey solution for cryptocurrency investing.”
The investment objective of ETC is to provide investors with exposure to the daily price movements of certain digital assets selected by the Manager from time to time, on a market capitalization basis, while experiencing minimal tracking error by investing in other publicly offered investment funds managed by Evolve.
ETC intends to initially invest in Bitcoin ETF (“EBIT”) and Ether ETF (“ETHR”) based on their respective market capitalization weightings based on the methodology employed by CF Benchmarks, or such other methodology determined by the Manager. The portfolio will be rebalanced monthly. ETC will not use leverage and does not intend to pay regular cash distributions.
With combined assets currently over $160 million, EBIT and ETHR provide investors with exposure to the daily price movements of the U.S. dollar price of Bitcoin and Ether, respectively, by utilizing the benefits of the creation and redemption processes offered by the exchange traded fund structure. EBIT’s holdings are priced based on the CME CF Bitcoin Reference Rate, a once-a-day benchmark index price for bitcoin denominated in U.S. dollars, while ETHR’s holdings are priced based on the CME CF Ether-Dollar Reference Rate, a once-a-day benchmark index price for ether denominated in U.S. dollars. Both indices are administered by benchmark administrator, CF Benchmarks.
“Investors often think of cryptocurrencies as highly correlated but there is a large dispersion of returns even though they often trend in the same direction,” says Elliot Johnson, Chief Investment Officer and Chief Operating Officer, Evolve ETFs. “The differences in volatility even between Bitcoin and Ether often cause dramatically different outcomes for investors depending upon their holding period. For example, last year Ether outperformed Bitcoin by over 150%; however, in 2019 Ether’s performance was negative while Bitcoin delivered over 90% return. Nobody wants to own the wrong thing at the wrong time. ETC looks to help investors by taking some of the guesswork out of investing in digital assets.”
No management fees will be payable on ETC, however, the underlying investment funds held by the Fund will pay management fees and will incur trading expenses. Currently, the management fees on each of EBIT and ETHR are 0.75% of net asset values, plus applicable sales taxes. Visit the Evolve website for further information on EBIT (https://evolveetfs.com/product/ebit/) and ETHR (https://evolveetfs.com/product/ethr/).
ETC will offer U.S. dollar denominated unhedged units (“USD Units”) and Canadian dollar denominated unhedged units (“CAD Units”). ETC does not seek to hedge any foreign currency exposure in respect of either the USD Units or the CAD Units.
About Evolve Funds Group Inc.
With over $1.8 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve is a leader in thematic ETFs and specializes in bringing disruptive innovation ETFs to Canadian investors. Evolve’s suite of ETFs provide investors with access to: (i) long term investment themes; (ii) index-based income strategies; and (iii) some of the world’s leading investment managers. Established by a team of industry veterans with a proven track record of success, Evolve creates investment products that make a difference. For more information, please visit www.evolveetfs.com.
A preliminary prospectus containing important information relating to securities of the ETF has been filed with the securities commissions or similar authorities in all provinces and territories of Canada. The preliminary prospectus is still subject to completion or amendment. A copy of the preliminary prospectus is available on SEDAR (www.sedar.com). There will not be any sale or acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued.
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Evolve ETFs Keith Crone