British Virgin Islands-based IDEG Asset Management (IDEG) unveiled its Ethereum Enhanced Portfolio, an actively managed fund tracking the price of ether (ETH) while using, it said, a futures arbitrage strategy to enhance returns and flatten volatility.
The fund will be part of the new TIMES suite of products, short for Trust, Interest, Mining, Yield Earnings and Structured Solutions.
“The Ethereum Enhanced Portfolio is our first of such products, providing qualifying investors an opportunity to capitalize on Ethereum, the most renowned smart-contract platform, while enhancing risk-adjusted returns compared to holding Ethereum,” said Emma Hu, product partner of IDEG, in a statement.
The company didn’t disclose the size or how much has been already invested in the fund.
Coinbase Prime will be the fund’s prime broker and custodian, building on a relationship that started in 2019. “The need for a reputable, compliance-focused partner to meet our unique trading needs and to safeguard our assets, and by extension safeguard the investments of our clients, led us back to Coinbase as our preferred prime broker and custodian,” said IDEG’s Chief Compliance Officer and COO, Suen Son Poon.
This Ethereum fund is launching as digital asset vehicles ex-Bitcoin have been gaining traction among institutional investors thanks to offering further diversification within the volatile digital asset sector. Most recently, Goldman Sachs began offering interested clients access to an ether fund issued by Galaxy Digital.
Last week Bitcoin-related products took the lion’s share of fund outflows with $131.8 million of redemptions, while funds focused on Ethereum (ETH) saw just $15.3 million in outflows, according to a CoinShares report.
The Ethereum Enhanced Portfolio fund will be available to qualified investors globally, except for the United States, with a minimum investment amount of $100,000, according to company spokesman Ian Stirling. “The majority of single-coin tracker funds on the market tend to be passive funds,” he added, noting that the fund will charge a fixed management fee based on the asset under management.
IDEG is also planning to launch additional thematic funds in 2022, with actively managed multi-coin, decentralized finance (DeFi) yield farming and GameFi/Metaverse play-to-earn (P2E) strategies being piloted in-house.