KUALA LUMPUR: Robo-advisory platform StashAway Malaysia has added bitcoin and ethereum-based exchange-traded funds (ETFs) for investors considering exposure to the cryptocurrency asset class.
It offers the Fidelity Wise Origin Bitcoin Fund (FBTC) and Fidelity Ethereum Fund (FETH) ETFs on its flexible portfolios in addition to over 70 ETFs representing different asset classes.
“Many of our clients have expressed interest in the long-term potential of major cryptocurrencies like bitcoin but have been hesitant because of security concerns or the complexities of navigating crypto exchanges.
“We’re now offering them a familiar and safe way to diversify their portfolios by incorporating crypto through a platform they already know and trust,” said StashAway Malaysia country manager Wong Wai Ken at a media event here yesterday.
The prospects of cryptocurrency going mainstream with the help of regulatory and government support, especially in Washington, has attracted institutional acceptance driving bitcoin’s price to shoot past the US$100,000-mark recently.
Due to cryptocurrency price volatility, Wong has advised a small allocation to the crypto ETFs in a diversified portfolio can enhance long-term returns without necessarily heightening volatility.
“You can either build multiple single ETF portfolios or you can make or you can choose a few ETFs and have all those in one. Over the long term, a 5% allocation to bitcoin in a traditional 60/40 portfolio can uplift returns while improving the risk-to-reward ratio,” he said.
Wong pointed out that a 60/40 portfolio base returning 6.9%, with a 5% allocation in crypto ETFs, could look at something like almost 2.5% more returns for a manageable level of risk exposure in the volatile crypto space.
He said when StashAway screened the Fidelity crypto ETFs, it looked at three main factors – the reputation of the fund manager, total cost and liquidity of the funds.
“We looked at the issuer’s expense ratio and liquidity. If something is not liquid, it’s going to be expensive because the spreads are going to be very tight.
“There are so many bitcoin and ethereum ETFs to choose from. We will choose the best for our clients and continue to monitor the performance of the ETFs,” Wong said.StashAway’s Flexible Portfolios has a transparent, straightforward management fee of 0.2% to 0.8% per annum with no lock-ins or minimum investment required.
Wong said StashAway Malaysia has over 50,000 clients with assets under management of above RM1bil.
The digital investment platform allows its clients to build diversified portfolios with exposure to both crypto and traditional asset classes like equities, bonds and gold via the various ETFs it offers.
