Sachin Bansal backed Navi MF files for Blockchain Fund, steers clear of crypto

Fibo Quantum

Navi Mutual Fund which is part of Sachin Bansal backed Navi Group has filed for a Blockchain Index Fund of Funds (FoF) with Sebi. The new fund is slated to track the Indxx Blockchain Index. However the index and hence the fund tracking it steer clear of companies directly connected to cryptocurrency such as crypto exchanges or large holders of crypto. Instead it counts companies like Advanced Micro Devices (AMD), Nvidia Corp and Inc among its top holdings. It has 100 stocks overall, a list which includes Indian companies like Infosys, Wipro, TCS and Kotak Mahindra Bank.

A previous attempt to launch a Blockchain fund was made by Invesco Asset Management Company. However after receiving Sebi approval for launch and announcing New Fund Offer (NFO) dates, Invesco AMC indefinitely deferred the fund on account of regulatory uncertainty. The Invesco Fund featured companies more directly related to cryptocurrency such as Coinbase Inc, a US listed cryptocurrency exchange. “The composition looks like it is designed to avoid every crypto company. Which is fine, as long as investors know that. My feeling is that investors investing in Blockchain companies are expecting the likes of Coinbase. Maybe even a near direct exposure to Crypto itself by participating in something like Grayscale Bitcoin Trust. I am, of course, surprised by the emphasis on software service providers, even if they provide Blockchain software development services,” said Ajeet Khurana, founder, Genezis Network, a consortium of crypto experts to fund startups.

A methodology document for the index says that the index will focus on ‘active enablers’ and ‘active users’ of blockchain. Active enablers are companies actively developing blockchain technology products or systems for their own use internally, but also for sale and support for other companies. Alternatively, active enablers are direct service providers for blockchain technology or have business models that rely on delivering products or services that utilize blockchain technology. Active Users are companies that are using blockchain technology which is generally supported by an Active Enabler or have at least one use or test case of using blockchain technology. The index is up 45.5% over the past year and 19.83% over the past 3 years as of 29th October 2021 according to the Navi MF filing.

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