The exchange-traded fund (ETF) that is traded in the US. WisdomTree Managed Futures Strategy Fund (WTMF) has added an allocation of about 1.5% to bitcoin (BTC) futures, citing the potential for “significant” returns uncorrelated to the broader market.
The fund allocation has been made in the form of regulated bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME), which is the same bitcoin derivative instrument that backs all US-listed bitcoin ETFs.
The announcement of Wisdom Tree He said the fund will not invest in bitcoin directly, which is in line with the position taken by many traditional financial institutions in the US.
As for the reason WisdomTree made the decision to invest in bitcoin futures, the firm said the asset is attractive due to the “potential for significant absolute returns.”
However, it is not just the potential returns that make Bitcoin attractive, they added, explaining that the lack of correlation with other assets is also an important consideration.
“Bitcoin has historically been an excellent diversifier from other traditional asset classes,” WisdomTree said.
“Our goal is to provide investors with this exposure in a risk-controlled manner through a systematic long / flat trend-following strategy that reacts quickly to changing market conditions,” they added.
And while the allocation so far has only been 1.5% of the fund, the fund’s mandate allows up to 5% of its assets to be made up of bitcoin futures, according to the fund’s website.
Meanwhile, according to data collected from MicroStrategyThe overview of the returns of different assets against BTC, a total of 212 companies out of the 500 that make up the broad S&P 500 index, performed better than bitcoin in 12 months as of Jan.6.
WTMF is an actively managed exchange-traded fund (ETF) that follows “a systematic trend-following strategy.” The ETF is designed to generate “positive total returns in rising or falling markets,” with the aim of keeping the fund’s performance uncorrelated with the broader equity and bond market, the website further said.
Currently, WTMF’s main holding is US Treasury bills, representing more than 42% of the fund’s assets. The fund is up nearly 18% in one year, but almost unchanged in the last 10 years, according to its website.
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