What is the difference between an ETF and other exchange traded products?
The key differences between ETFs and ETNs are:
- ETFs are approved by regulators and are overseen by regulated managers. These managers sign off all activities and report on a regular basis to the regulator. ETNs do not have such a party providing this level of investor protection.
- ETFs hold the Bitcoin as an asset of the fund whereas ETNs, being debt instruments/structured products, may be backed by swaps or hold any physical assets as collateral under complex security arrangements.
- As a fund structure an ETF will be categorised under SFDR whereas an ETN cannot be. One of the primary differentiators for the Jacobi FT Wilshire Bitcoin ETF is the decarbonisation of the underlying assets with the use of Renewable Energy Certificates (as explained in more detail in this section www.jacobiam.com/sustainability). The fund has been independently verified by Kennedy van der Laan as an SFDR Article 8 ETF. Whilst some crypto ETN providers claim to offset carbon emissions from the Bitcoin backing their ETNs, these carbon offsetting schemes have come under scrutiny for their efficacy or even existence. Decarbonising the holdings addresses the generation of emissions from the inception of the Bitcoin creation.