Swiss online banking and brokerage leader Swissquote Group Holding SA (SWX:SQN) has announced that it has launched the first actively managed multi-cryptocurrency Certificate, called “Multi-Crypto Active Index”.
The Multi-Crypto Active Index allows mainstream investors to invest in a diversified portfolio of four different cryptocurrencies through a traditional financial vehicle publicly traded on the SIX Swiss Exchange.
The portfolio consists of the four cryptocurrencies with the highest trading volume and highest market capitalization: Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. By buying a portfolio of four different cryptocurrencies, investors are less exposed to the risks of potential losses by holding their investment in a single cryptocurrency.
Swissquote Head of Market Strategy Peter Rosenstreich stated:
It is the next evolutionary step in our strategy of opening up the cryptocurrency market to the mainstream investor by creating investment opportunities that reduce volatility while offering the transparency that comes with the listing at the Swiss Exchange. This new portfolio is designed for investors who recognize the potential of cryptocurrencies but rather than taking the risk of investing in a single one, look for a structured product that is easy to trade and actively managed.
In the last nine months Swissquote has quickly expanded its cryptocurrency offering. Already in mid-2017 Swissquote became the first European online bank to offer Bitcoin investing on its trading platform. In November 2017 the bank launched the first Bitcoin Certificate, and in December of last year it was the first bank to offer five cryptocurrencies.
The Certificate’s volatility is reduced by a quantitative algorithm developed by Swissquote’s Quantitative Asset Management team. The algorithm uses historic price information to optimally allocate investments between the four currencies. The minimum share of each of the four cryptocurrencies is 10%, so the maximum weight of a single cryptocurrency within the portfolio can go up to 70%. The objective of the algorithm is to stabilize price volatility and thereby reduce the risk of downturns.
The Swissquote “Multi Crypto Active Index” (Symbol: SQCRTQ, ISIN CH0372704095, listed on https://www.six-structured-products.com/) is denominated in US Dollars. Minimum investment is 1,000 US Dollars, which is also in the initial price of the Certificate. Management fees are 1.5% per year. There is no minimum holding period.