Fidelity Adds Bitcoin Exposure to Traditional ETFs

Fidelity Investments Canada, the country’s first regulated institutional bitcoin depository, has added a bitcoin allocation to two of its all-in-one exchange-traded funds, a set of low-risk ETFs that aim to provide investors with exposure to different assets, regions, market caps and investment styles. The addition will raise the risk ratings of the funds to “medium”.

Fidelity said in a press release Tuesday that the decision to add bitcoin exposure to all-in-one funds “was taken for its diversification benefits with the potential to improve risk-adjusted returns going forward. “.

The Fidelity All-in-One Balanced ETF provides investors with diversified exposure to different asset classes in different regions of the world with a neutral combination of 60% equity factors and 40% systematic and actively managed fixed income ETFs. Although similar, the Fidelity All-in-One Growth ETF has a greater risk appetite and increases exposure to equities to seek capital appreciation through an 85% and 15% split, respectively.

Bitcoin allocation is done through Fidelity’s spot bitcoin ETF, the Fidelity Advantage Bitcoin ETF, launched in November after consecutive failures to gain regulatory approval to list a fund that invests directly in BTC in the markets. Americans. The Securities and Exchange Commission approved bitcoin-linked ETFs in America last year. However, these offers invest in bitcoin futures, which means they offer indirect exposure to bitcoin instead of direct and come with increased costs and limits on the number of contracts they can. hold for each month.

Despite a launch marked by new records, much of the excitement over bitcoin futures ETFs waned as investors realized the supply might not work as a true indicator of the price of bitcoin. At the end of October, the ProShares Bitcoin Strategy (BITO) ETF accumulated $ 1 billion in trading volume on the first day and became the fastest ETF to reach $ 1 billion in assets the following day; however, as of January 10, 2022, BITO had only slightly increased its holdings to $ 1.03 billion.