Investment Funds for 2020 | Index Funds Centralized Decentralized and the Blockchain

By Morne Olivier   Sep 22, 2019 6 Min Read

Investment Funds for 2020 | Index Funds Centralized Decentralized and the Blockchain

On the outset, this article has been written to put in perspective Index Funds as we know them, which new kind of Index Funds are developing with Cryptocurrencies (Digital Assets) and what developments are taking place in the Global Capital Markets with Blockchain developments.

This is an easy to read summary to ensure anyone that wants to invest in their future understands the options available to them in our rising digital era. I am not a Financial Advisor, (Full Disclaimer provided) and research drawn from in the Reference.

What is an Index Fund?

Index Funds are Basket or Bundle Funds. A Fund Manager, Brokerage or Investment Bank creates the Index and can Manually adjust the assets inside the suite. The spread provides low-cost entry for investors with a “not all my eggs in one basket” feel. Diversification like this provides for instant exposure to a wide array of assets. It is really the easiest option for anyone to enter the market. In fact, most Brokerages rely heavily on Index Funds as their foundation to ensure stability to their clients.

Who is it for?

Index Funds are for anyone! You need a basic understanding of what a Fund means and a transparent relationship with your broker or brokerage. If you are more salted and like researching like me, you will get to know most of the Suite’s assets and question evolving new ones.

Index Funds are therefor seen as Low-Risk Investments. As a Long-Term approach, Return on Investment has been around 10% for the prominent larger funds like the S&P 500, but do bear in mind in Short Term frameworks markets can and do fall.

What are your current options?

This is where it starts getting interesting.

Institutional Index Funds

Here are some Examples of Global Traditional Index Funds

-   Fidelity ZERO Large Cap Index / Analysis: https://www.bloomberg.com/quote/FNILX:US

-   Vanguard S&P 500 ETF / Analysis: https://www.bloomberg.com/quote/VOO:US

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What New Options are Available?

Cryptocurrencies/Digital Assets/Tokens – USDT/DAI/$ Funds

Here are some examples of The New Digital Era Funds

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-   Revix (Centralized) 

Revix is an all in one Bundle Fund. The same principle as the Index Funds apply. The Revix team just said, “Hey wait a minute, if the world is going to be changing its financial structures in line with the new Digital Era, well then we are going to make it easy for anyone to participate or invest into that.”

So they decided to put together Bundled options of Top Ranking Cryptocurrencies.

Their mythology behind the screening of the spreads they Bundle: Top 10, Payments, Platform & Privacy. The Bundle Funds are rebalanced and reassessed every month. The Funds are hedged with USDT Tether Stable Coin to assure stability and growth in the Bundles.

This is plain and easy investing in a developing Digital Currency Market. The keyword here is DEVELOPING, as from where I am sitting DEVELOPING Financial Infrastructures mean that in a few years’ time these will become the Developed Financial Infrastructure, “ I like to be at the beginning of things”, rather than feeling that I lost out and saying “aaah I should have done that a few years ago”

As per our Traditional Index Funds, this should be approached with a Long-Term Vision. Scaling is the probability and it will be that positive torrent of events that will see Cryptocurrency take center stage.

-   BURNR (Decentralized)

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Now let’s look at BURNR. The BURN Token takes the Swapping/Trading of Cryptocurrency to a whole new level. This platform involves a little more work, but usually with a “bit more input – comes a bit more output”. The same principle applies – it’s a Fund with a Suite of Tokens or Cryptocurrencies. The New intricate part of it is BURNR Token, it holds its own Ecosystem of Tokens, written in Smart Contracts on the Decentralized Blockchain of Ethereum.

That’s a mouth full I know! What it means is that BURNR Token was created to Re-Balance a Deflationary suite of Tokens that can only Increase in Value with every single transaction that takes place! This is done via Audited Smart Contracts on the Immutable Decentralized Ethereum Ledger.

So, how do we make BURNR do more Transactions = More Value?

With BURNR and The Burn Token, you need to do a bit more work yourself – “The Hands-on Approach”

Like with Traditional Funds where the Broker or Brokerage is hands-on, Picking the Stock they want in the Basket or Bundle, so the BURNR Fund has created its own set of working stocks to re-balance.

“Hands-on Approach” – Well here you become the Broker – True Mission of indulging in your own ROI! That sounds very romantic but obviously a bit more intricate. At this stage, you need to learn more about how to buy and sell/trade/swap Cryptocurrencies. If you know the basics, then it is probably a good time to dive in a bit deeper. This is Decentralized territory, which means YOU are in charge of your money!

Global Changes going forward?

Here we have to look at the “BIG BOYS” the large trend-setting Corporations that everyone will look to and say, “Well if they are doing it then so must we!”

R3, Corda & Hyperledger: The Financial Industries Benchmark to New Digital Finance – yes really!

In short “R3 is an enterprise blockchain technology company. It leads an ecosystem of more than 300 firms working together to build distributed applications on top of Corda for usage across industries such as financial services, insurance, healthcare, trade finance, and digital assets. It is headquartered in New York City.”

R3 is setting out to create a new global capitals market powered by Digital Assets on the Corda Blockchain. The Corda network focusses on the evolution of Blockchain operating in a highly regulated space. Digital Assets can be categorized in three main sectors of evolution:

-   Cryptocurrency Revolution (past)

-   Enterprise Blockchain Revolution (past/present)

-   Digital Assets Revolution (present)

It is the Digital Assets (Smart Contract Tokens) that will Automate Financial Services combining “old” and new to perform unparalleled investment capabilities. On Corda the Tokens are split into four categories:

-   Depository Receipt

-   Native Asset

-   Consumer Tokens

-   Payment Tokens

Note that the same principle applies throughout, it's still a Fund, Bundle or Suite with Assets either managed or coded to do what we want them to do. Serve humanity in the interest of Financial Services, Insurance, Healthcare and Logistics to name a few with an improved model of value.

Conclusion:

The “New” Blockchain Revolution has started, integration into Global Capital Markets has begun. R3 is leading the way in bridging the gap between the new Digital Assets, Banks, Law Firms and Exchange Groups.

It is however very important to note how the Smaller Entrepreneurial Enterprises like Rivex and BURN can provide similar solutions in a more personalized fashion. From an investment point of view, Rivex and BURN are certainly on the right track leading by R3 ‘s example in their own right.

Bringing us back to Index Funds, well R3 is seeking to find solutions to integrate the two worlds, Rivex and BURN seek to capitalize on the Digital Assets Market that has not even started yet. Options are really there for the taking. 

Leave some comments, Share and Like to let me know what you think!

Morne Olivier

 Reference:

Inthanon Phase 2: Enhancing Bond Lifecycle Functionalities & Programmable Compliance using DLT

Ethereum DEFI ecosystem

Building Value with Blockchain Technology: How to Evaluate Blockchain’s Benefits

https://www.bloomberg.com/

https://www.bloomberg.com/africa

https://www.bankrate.com/investing/best-index-funds/





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