- The Fund primarily invests in equity and equity-related securities in “Blockchain Innovation Companies” located worldwide, which are companies likely to benefit from or enable blockchain technology. Blockchain technology enables companies to independently maintain and exchange digitalized transactional data in a standardised format.
- The Fund investment portfolio may fall in value and there is no guarantee of the repayment of principal.
- Blockchain functionality is reliant on the internet. A significant disruption of internet connectivity or cyber security failure may result in substantial loss of business or user data of the Blockchain Innovation Companies and may have an adverse impact on the net asset value of the Fund.
- The Fund’s investments are concentrated in Blockchain Innovation Companies which may also subject to risks of (i) new technology; (ii) security; (iii) cyberattack; (iv) intellectual property; (v) regulatory; (vi) third party product; (vii) reliance on the internet; (viii) limited operating history; (ix) semiconductor sector; (x) internet company; (xi) software industry.
- The Fund’s investment in emerging markets (including Brazil, China, India and Mexico) may involve increased risks and special considerations such as liquidity risks, currency risks/control, political and economic uncertainties, legal and taxation risks, settlement risks, custody risks and the likelihood of a high degree of volatility.
- The Fund may invest in financial derivative instrument (“FDI”) and may use FDI for efficient portfolio management (“EPM”) purpose. Risks associated with FDI include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. The leverage element/component of a derivative can result in a loss significantly greater than the amount invested in the derivative by the Fund.
- The Fund may invest in small-capitalization or mid-capitalization companies. The stock of such companies may have lower liquidity and their prices are more volatile to adverse economic developments than those of larger capitalization companies in general.
- Investor should not rely solely on this document to make investment decision. Please read the offering documents for more details of the highlighted risk factors.
What is blockchain technology?
- A blockchain is essentially a digital database or ledger that stores information.
- A ‘traditional’ database or ledger records its information in standalone tables or spreadsheets, and is essentially stored and owned by a centralized source. This traditional way may have inherent flaws, as it depends entirely on the centralized owner to properly maintain validity, history, security and all types of integrity and trust risks.
- A blockchain improves upon ‘traditional’ databases or ledgers in a way that makes it extremely challenging, regardless of honest or nefarious intent, to incorrectly change, hack, or cheat the system.
- A blockchain decentralizes ownership of the database or ledger, whereby the entire network of computer systems supporting that blockchain contributes to the verification and safe-keeping of records. Blockchain Technology is also referred to as Distributed Ledger Technology.
- With a blockchain, data is stored in chunks or blocks. When each block is filled, it is connected to the previous, forming an easy-to-follow chain, and this historical record is added to every participant’s ledger.
- Each block that is filled, is verified by the network and set with a specific timestamp making it very difficult to alter. And as the blocks are part of a linked chain, no single block can be removed.
Characteristics of blockchain technology
Consensus Verification
All blockchain participants share the same documentation, which can only be updated with everyone’s agreement.
Decentralised
Control and decision-making in a blockchain promotes aspects such as transparency and efficient data reconciliation. It also lowers the risk of a “single point of failure.”
Unchangeable
Blockchain provides a lifetime ledger for an asset, including where it is, where it’s been, and all the transactions in between.
Secure
Network members would notice any alterations to the ledger and split off to a new, unaffected version of the chain.
Blockchain has multiple uses
Blockchain technology is already being utilised in multiple industries, including financial services, healthcare, supply-chain management, and food safety. Its use is also being trialled across an even wider variety of industries. Anything that requires records to be kept can, in theory, be supported or assisted by blockchain technology.
For example, the global financial system relies heavily on third parties to help with asset exchange, settlement and servicing. Blockchain can disrupt this established system by offering a unique way of avoiding the inefficiencies and potential fraud opportunities posed by using a third party.
Case study: Leading retail coffee chain
The company put into place a bean-to-cup traceability initiative using blockchain technology to enable end-to-end transparency from the time a coffee bean leaves the farm, through transit, and finally to the point where it is brewed and put into a customer’s cup. Blockchain creates a new data stream that Starbucks can use for its own inventory management systems and pricing. What’s more, this is precisely the type of information today’s ethically conscious consumers want.
Applications of blockchain technology
There is already a diverse range of uses that have emerged in both the private and public sectors:
Identification – Voter registration is being facilitated via a blockchain project in Switzerland
Healthcare - A number of healthcare systems that store data on the blockchain have been pioneered
Journalism - Decentralised, blockchain-enabled journalism has the potential to limit censorship and increase transparency
Mobile Payments – One company’s blockchain ledger has been latched onto by a group of Japanese banks that will use it to enable quicker mobile payments
Energy – A test project is being developed that will help energy suppliers track the distribution of their resources in real time while maintaining data confidentiality
Advertising – A New York company has been trialling blockchain as a means of providing an advertising marketplace for publishers
Insurance – An insurer is using a smart-contract based blockchain to help save costs and increase transparency
Land Registry –Land registry titles in Georgia are now being stored on the blockchain in a project developed by the country’s National Agency of Public Registry
Music – Musicians are leading a blockchain-based initiative to ensure artists are fairly rewarded for their creative efforts
Real Estate – Blockchain is now being used to complete real-estate deals, the first of which was conducted in Kiev, Ukraine
National Security – For the past two years, the US Department of Homeland Security has been using blockchain to record and safely store data captured from its security cameras
Enterprise –A leading search-engine provider is developing a bespoke blockchain that will be integrated into its cloud-based services. This should enable businesses to store data directly with the business
Border Control – A border-control system has been devised in the Netherlands that uses blockchain to store passenger data
Fine Arts – As one project is currently proving, it’s possible to dramatically reduce art forgeries by storing certificates of authenticity on a blockchain
Railways – In Russia, a rail operator is maintaining repair requests and rolling stock inventory data on a blockchain料
Supply Chain –Two leading companies have partnered in China to create a blockchain project that will monitor food safety
Diamonds – Blockchain is being used to track the import and sale of diamonds
Shipping – Shipping is a natural fit for blockchain. One company is already testing a project within the maritime logistics sector
Why invest in blockchain technology?
Characteristics of blockchain technology
Why invest in the Blockchain innovation theme?
- The pandemic has helped accelerate the development of many useful blockchain solutions
- Amid high levels of trust in this technology, blockchain has the potential to disrupt nearly every industry.
- As it is utilised by a broader range of companies, the blockchain theme should provide an attractive, long-term investment opportunity
- There is an opportunity to invest in businesses that are the early adopters of blockchain technology. These companies will ultimately set the standard within their respective industries.
About the Fund
Available share classes
| Share class | Minimum initial investment | ISIN | Factsheet | Bloomberg code | Launch date |
| USD B (Acc.) | USD10,000 | IE00BHPRN162 |  |
BNYDUBA | 31 August 2021 |
| HKD B (Acc.) | USD100,000 | IE00BHPRN501 | |
BNYMELB ID | 19 May 2023 |
- Emerging Markets Risk: Emerging Markets have additional risks due to less-developed market practices.
- Market Capitalisation Risk: Investments in the securities of small to medium-sized companies (by market capitalisation) may be riskier and less liquid (i.e. harder to sell) than large companies. This means that their share prices may have greater fluctuations.
- Blockchain Innovation Companies Risk: The value of securities of Blockchain Innovation Companies may be negatively impacted by changes in regulation and are dependent upon consumer and business acceptance of the distributed ledger technology. Distributed ledger technology is a new and relatively untested technology which could be vulnerable to fraud, particularly if a significant minority of participants colluded to defraud the rest. The investment’s value may be more subject to risks of developing technologies, competitive pressures and intellectual property rights challenges.
Past performance is not indicative of future performance. The value of investments and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested.
WARNING
This material is for retail investors and is not intended as investment advice. Investment involves risk. Past performance is not a guide to future performance. The offering document of the fund(s) and the Key Facts Statements (KFS) should be read for further details including the risk factors, in particular (where relevant) those associated with investments in emerging markets or using financial derivative instruments for investment purposes. Past performance information presented is not indicative of future performance. Investment returns may be exposed to exchange rate fluctuations. The value of investments may go down or up. This document has not been reviewed by the Securities and Futures Commission. You should not rely on this document alone to make investment decisions. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. This document may not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or not authorised. This material should not be published or distributed without due authorization from issuer. No warranty is given as to the completeness of this information and no liability is accepted for omissions in such information. The Fund is a sub-fund of BNY Mellon Global Funds, plc (BNY MGF), an open-ended investment company with variable capital (ICVC) with segregated liability between sub-funds. Incorporated with limited liability under the laws of Ireland and authorised by the Central Bank of Ireland as a UCITS fund. The Fund may not be registered for sale in some markets.
In Hong Kong, the issuer of this document is BNY Mellon Investment Management Hong Kong Limited, which is registered with the Securities and Futures Commission (Central Entity Number: AQI762). This document has not been reviewed by the Securities and Futures Commission. Information in this document is subject to change without notice. To the extent permitted by applicable laws, rules, codes and guidelines, BNY Mellon Investment Management Hong Kong Limited accepts no liability whatsoever whether direct or indirect that may arise from the use of or reliance on the information contained in this document. The information has been provided without taking into account the investment objective, financial situation or needs of any particular person. To the extent permitted by applicable laws, rules, codes and guidelines, BNY Mellon Investment Management Hong Kong Limited and its affiliates are not responsible for any subsequent investment advice given based on the information supplied. BNY Mellon Investment Management Hong Kong Limited and any other BNY Mellon entity mentioned are ultimately owned by The Bank of New York Mellon Corporation.
AP4095-17-07-2023 (12M)