An upcoming Korean Exchange Traded Fund (ETF) that tracks the price of Bitcoin has been announced by asset management firm Korea Investment Management, a subsidiary of Korea Investment Holdings Co (KIH). Started in 2002, KIH has more than $21B USD under management.
ETF’s track an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange.
The new ETF will track the price of bitcoin as it trades on Korbit, the largest of South Korea’s bitcoin exchanges, and will be traded on the sole securities exchange operator in South Korea, Korea Exchange (KRX). Investors can trade in the KRX securities markets through a trading account at one of many security companies with KRX membership.
“The main difference between ETFs and other types of index funds is that ETFs don’t try to outperform their corresponding index, but simply replicate its performance. They don’t try to beat the market, they try to be the market.”
In 2012 the very first regulated bitcoin fund launched. An ETF simply named “the Bitcoin Fund,” which is traded exclusively on the Hedge Fund Marketplace platform, Exante. The fund achieved the biggest single investment vehicle gain in world history, with a 4,847% return, when Bitcoin’s price spiked at the end of 2013. EXANTE is under the jurisdiction of the European regulator MiFID.
In July 2013, the Winklevoss twins filed their application for an ETF in the US. “The investment objective of the Trust is for the Shares to reflect the performance of the price of Bitcoins, as measured by the Winklevoss IndexSM (“Winkdex®”), less the Trust’s expenses.”
“The Shares represent units of fractional undivided
Originally appeared at: http://bravenewcoin.com/news/bitcoin-etfs-opening-markets/