I am trying to understand how this product can be successful in the long run for both it’s owners and the Index COOP. Currently, it seems the business model does not encourage long-term investment. Below, I outline how I came to this conclusion and I am sharing it because I fear most investors will draw the same conclusion unless the streaming fee is changed or the benefits of the product are explained better to investors. I am obviously new here so any DM’s or replies will be extremely helpful.
I can’t seem to justify the .95% streaming fee I pay you when I compare it to the .04 expense ratio I pay for VFIAX, a Vanguard fund. I am 44 years old with a degree in economics and 15 years of financial services experience. Prior to 01/13/2021, I had no working knowledge of crytpo. My college roommate, who runs a division of an investment firm, told me to invest in Grayscale’s Bitcoin and Ethereum funds. I dumped about $70,000 into the funds. Realizing that the funds had a premium I started looking into investing in crypto directly, which led me to DEFI. Knowing the best way to learn the space would be to have skin in the game, I put $10,000 onto Etoro. I quickly bought a nano ledger x and tried to find an index fund because you can’t beat the market, you can only try to keep up if you buy and hold, less fees. I started with Piedao, which led me to coingecko. Sorting by Index, I saw DPI. I bought 1 ETH of DPI on 02/24. Since then, I have been reading your forum and listening to your podcasts, both of which are exceptional. I even bought 1 more ETH of DPI last night. However, I went to bed realizing I should just buy the 13 underlying assets myself. Not only will I not have to pay 1.00% streaming, but I will learn much more because I will be tracking each item in my portfolio.
Interestingly, if your fee has been .25% I likely would have never stopped to learn your product in depth, so I would have just kept buying more of it. Even with what I know now, there is a price point at which your fee makes sense. What am I missing? Won’t a large percentage of your clients eventually come to the same conclusion meaning the product won’t be viable?