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Fidelity, UBS and State Street Global Advisors have confirmed that, like their rivals BlackRock and Invesco, they plan to launch products that provide exposure to cryptocurrencies, such as bitcoin.
European exchange-traded products and mutual fund assets exposed to cryptocurrencies topped 10.5 billion euros, according to Morningstar data, showing the potential appeal of these products to asset managers .
XBT, which is part of CoinShares, is the largest supplier in Europe, with assets of 5.4 billion euros spread across eight products domiciled in Sweden and Jersey, followed by the Swiss group 21Shares, which manages 2.1 billion euros across its entire range.
Matteo Andreetto, SSGA’s Head of SPDR Exchange Traded Fund Business for Europe, Middle East & Africa, said: “It is clear that we are looking at the space and assessing how it is evolving.
This article was previously published by Ignites Europe, a title owned by the FT group.
“Customers are not only asking about cryptocurrencies, but also specifically about SPDR crypto products. They love that we are a sturdy and secure pair of hands.
Fidelity said it “stays close to the evolution of cryptocurrencies [ . . . ] as part of a broader exploration of the potential of digital assets and the distributed ledger technology that underpins them ”.
“As you might expect, Fidelity International is exploring the potential of this technology for the benefit of clients,” added Fidelity.
Clemens Reuter, Global Head of ETFs at UBS Asset Management, said: “[Cryptocurrency is] an area that everyone should be looking at right now. However, he added: “To date, we haven’t decided to launch anything.”
In May, Invesco told Ignites Europe it was “investigating” digital asset exposure for ETPs.
Jose Garcia-Zarate, associate director, passive strategies at Morningstar, said he expected more cryptocurrency products to be launched as part of the “gimmicky” trend.
“ETFs lend themselves to this kind of exposure,” he added.
However, asset managers have also highlighted the barriers to entry into the cryptocurrency space.
Reuters noted that investing in cryptocurrencies was not yet permitted for Ucits funds.
Andreetto said SSGA would not launch an ETF until the group was “sure” that it could reach the “very high bar” to sit alongside its other ETFs and “have all the characteristics of [a] SPDR product ”.
“Going to FTE would be a deviation for us,” he adds.
European ETPs and funds offering cryptocurrency exposure generated an average return of 461.7% over the 12 months ending in late October. They achieved an annualized return of 116.3% over three years, according to Morningstar data.
But Garcia-Zarate said investors should be “careful what they want” with cryptocurrency products.
Investors “need very in-depth due diligence” to understand how cryptocurrencies and related futures markets work, he said.
* Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. It covers everything from new product launches to regulations and industry trends. Trials and subscriptions are available at igniteseurope.com.
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