Digital assets gain traction among Asian investors

Digital assetsThere is a growing interest among Asia fund and wealth managers in digital assets based on the expectation that retail demand for cryptocurrencies will spill over into the mutual funds and ETFs market. This is the finding from a report by investment consultant Cerulli Associates, which found that asset managers are adding crypto and blockchain themes into their mutual funds offerings. At the root of this move is the appetite for cryptocurrencies among young and relatively risk-tolerant investors. However, there is also a similar appetite among wealthy Asian investors, states Cerulli, especially through ETFs as well as direct investments. According to Cerulli’s research, 55% of family offices indicated interest in increasing exposure to crypto over the next two years. There is also interest in the broader digital assets market, as seen by the blockchain-themed funds launched in South Korea, Thailand and Singapore last year. Cerulli also states that distributors in the region have called for their asset management partners to “develop niche product ideas that offer long-term opportunity, including technology themes such as blockchain and cryptocurrency”. One potential sticking point is regulation, considering South Korea does not yet allow for crypto ETFs or mutual funds. And while Singapore is slightly warmer on digital assets, it still lags behind Australia regarding crypto-related ETF listings. “Crypto funds offer an important asset-gathering opportunity for managers,” said Cerulli managing director Ken Yap. “For investors, the growing number of mutual funds and ETFs coming to market help to widen product choices or even legitimize crypto investing by providing arguably safer routes to accessing this asset class, compared to direct crypto investing.” © 2022 funds global asia

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