(Reuters) -T. Rowe Price is seeking regulatory approval to launch an actively managed exchange-traded fund tied to multiple digital currencies, according to a filing with the U.S. Securities and Exchange Commission on Wednesday.
It is the first foray into the cryptocurrency space by the $1.77 trillion asset management firm, nearly two years after the SEC’s approval of spot bitcoin ETFs.
“It’s a surprise to see them as a relatively late entrant, but they’re planning to offer something differentiated to try and break into the space,” said Bryan Armour, an ETF analyst at Morningstar.
While asset managers have flooded the SEC with applications to launch ETFs tied to individual coins, it remains rare to see proposals for new multi-coin products that are actively managed, Armour added.
The proposed ETF would offer investors exposure to anywhere from five to 15 coins that meet the fund’s eligibility standards, a list that currently ranges from bitcoin and ether to solana, dogecoin and Shiba Inu, according to the prospectus. Managers would seek to outperform the FTSE Crypto US Listed Index and use fundamental, valuation and momentum factors to determine which assets to hold and their relative weights within the portfolio, a spokesman told Reuters.
As outflows continue from its traditional mutual funds, T. Rowe Price has been seeking to diversify into new areas, Armour said. It has launched 24 ETFs in recent years, and last month announced a new partnership with Goldman Sachs to explore ways to develop new private market products for retail investors. As part of that agreement, Goldman said it will buy up to 3.5% of T. Rowe shares, an investment that could top $1 billion.
“This is a firm looking for new niches,” said Armour.
T. Rowe Price has been monitoring developments in the digital assets space closely and developed the ability to trade digital assets in recent years, the firm’s spokesman said. In 2022, it hired Blue Macellari, a former crypto hedge fund executive, to become head of its digital assets strategy.
“It’s exciting to see them expand their ETF lineup beyond stock and bond exposure,” said Todd Rosenbluth, head of research at VettaFi, an ETF market analysis firm.
Scores of cryptocurrency ETFs await SEC approval in the midst of a government shutdown that has reduced the agency’s staffing to skeletal levels. They are unlikely to get the green light until the shutdown ends, in spite of the SEC’s adoption of new listing standards clearing the way for a host of new products such as the T. Rowe Price ETF.
(Reporting by Suzanne McGee in Providence, Rhode Island, and Arasu Kannagi Basil in Bengaluru; Editing by Alden Bentley, Shilpi Majumdar and Matthew Lewis)
