U.S. Registered Exchange Traded Fund (ETF) WisdomTree Managed Futures Strategy Fund (WTMF) added roughly 1.5% to Bitcoin (BTC) futures, citing the potential for significant returns not tied to the broader market.
The funds were allocated in the form of regulated Bitcoin futures contracts traded on Chicago Mercantile Exchange (CME), which is the same bitcoin derivative that supports all US registered bitcoin ETFs.
In the announcement WisdomTree it says the fund will not directly invest in bitcoin, which is in line with the position taken by many traditional financial institutions in the US.
Regarding the reason why WisdomTree chose to invest in bitcoin futures, the firm said the asset is attractive because of the potential for significant absolute returns.
However, it is not only the potential profitability that makes Bitcoin attractive, they added, explaining that the lack of correlation with other assets is also an important factor.
Bitcoin has historically been a great diversifier over other traditional asset classes, according to WisdomTree.
Our goal is to provide investors with this risk-controlled risk through a systematic long / flat trend following strategy that responds quickly to changing market conditions, they added.
And while only 1.5% of the fund has been allocated so far, 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 the survey MicroStrategy on the return on various assets versus BTC, a total of 212 out of 500 companies that make up the broad SP 500 did indeed perform better than Bitcoin on a 12-month basis as of January. 6.
The WTMF is an actively managed exchange-traded fund (ETF) that follows a systematic trend-following strategy. The ETF is designed to generate positive overall returns in rising or falling markets in order to maintain fund performance not correlated with the broader market for equities and fixed income instruments, the website says.
Currently, WTMF’s main asset is US Treasury bills, which account for over 42% of the fund’s assets. The fund has grown nearly 18% over the year, but has barely changed over the past 10 years, according to its website.
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