BlackRock, one of the world’s largest asset managers, has added bitcoin to its Global Allocation Fund, which is available to ordinary and passive investors. The fund, which has around $15 trillion in assets under management, typically invests in a diverse range of securities, including equity, debt, and short-term securities issued by both corporations and governments, and aims to invest at least 70% of its total assets in these securities.
The fund also has the flexibility to invest in the equity securities of smaller and emerging growth companies, and to manage currency exposure. In addition to these traditional investments, the fund will now also invest in cash-settled bitcoin futures traded on commodity exchanges registered with the Commodity Futures Trading Commission.
The inclusion of bitcoin in the fund is significant as it is one of the first general funds to offer exposure to the cryptocurrency, and suggests that it is seen as a viable addition to even a conservative portfolio. However, the volatility of bitcoin and other cryptocurrencies means that other fund managers, such as Vanguard, have chosen not to add them to their offerings.
That’s correct. While some fund managers, such as BlackRock, have decided to include bitcoin and other cryptocurrencies in their offerings, others, like Vanguard, have chosen not to due to the inherent volatility of these assets.
It’s worth noting that the decision to include or exclude cryptocurrencies is often based on a fund manager’s investment philosophy and risk tolerance. Some fund managers may believe that the potential returns from cryptocurrencies justify the added risk, while others may prefer to stick with more traditional investments that have a longer track record and are less volatile.
Ultimately, it’s up to each individual fund manager to determine the appropriate mix of assets for their portfolio based on their specific goals and risk profile.
As with any investment decision, it’s important for fund managers to carefully consider the risks and potential rewards of each asset they are considering adding to their portfolio. Factors such as the historical performance of the asset, its level of volatility, and the overall economic and market conditions should all be taken into account when determining the appropriate mix of assets.
Ultimately, the goal is to create a well-balanced portfolio that is aligned with the fund’s investment objectives and risk profile, while also maximizing returns for investors.
