Digital Wealth: $900B AUM DWS and Galaxy Digital to launch crypto ETPs
Galaxy's asset management unit is split between Fund Management, which has $2.4B in AUM and offers crypto and blockchain exposure, and Galaxy Interactive, which focuses on gaming and the metaverse
Hi Fintech Futurists —
Happy Thursday! Today we highlight the following —
NORTH AMERICA: Galaxy Digital to Develop European-Listed ETPs With Asset Manager DWS
EMEA: A First-Of-Its-Kind Partnership Between Syfe And PIMCO To Offer Fixed Income Portfolios
GEOGRAPHIC NEWS CURATION
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Digital Wealth Short Takes
⭐🇺🇸 Galaxy Digital to Develop European-Listed ETPs With Asset Manager DWS - CoinDesk, April 26, New York
Blockchain investment bank Galaxy Digital and German asset manager DWS, which has $900B+ in AUM, are working together to release several exchange-traded products (ETPs) on digital assets, which will be accessible via traditional brokerage accounts.
For context, Galaxy's asset management unit is split into Fund Management, which has $2.4B in AUM and offers crypto and blockchain exposure spanning passive and active strategies, and Galaxy Interactive, which focuses on gaming and metaverse venture investments. The Passive Funds include Bitcoin, Ethereum, and a Crypto Index strategy. The Galaxy Ethereum Funds, for example, invest directly in Ether and are priced based on the Bloomberg Galaxy Ethereum Index.
The Galaxy Active funds, like the Liquid Alpha Fund, also focuses on blockchain and crypto. It requires a minimum investment of $1MM and has an investment process incorporating Macro, Fundamental, and Quantitative factors. For fundamental analysis, Galaxy looks at protocols, tokenomics, and their "relative value." Quantitative models use statistical analysis, and potentially machine learning (deep learning, neural networks), to execute asset selection. However, many traditional statistical methods apply poorly to the crypto markets given short data histories and unrealistic assumptions.
Active investment strategies in crypto can capture market inefficiencies in spot, derivative, and DeFi markets. The Efficient Market Hypothesis has not yet sunk its economic truths into the space, given that memetic and sentiment-driven models tend to be more profitable. Galaxy points to more fundamental progress —
"As crypto markets mature, sub-sectors and tangible use-cases will continue emerging. When paired with lower intra-asset correlations, we now have a ripe environment for more thesis-driven, fundamental, or complex trading and investment strategies to drive alpha."
Unfortunately, intra-asset correlations have only increased since 2022 given the macro-environment.
That said, this story is about distribution. Putting crypto products in traditional ETP wrappers will grow investment flows. With the relative collapse of DCG and the political obstructionism of the SEC, there is a gap for traditionally accessible product. Even though it is inefficient, it is perhaps necessary.
⭐🇸🇬 A First-Of-Its-Kind Partnership Between Syfe And PIMCO To Offer Fixed Income Portfolios - PR Newswire, April 26, Singapore
Singapore-based digital wealth manager Syfe has a suite of regulated investment products, which includes trading and wealth management, and over 100,000 customers. The company has raised $50MM+ to date (the latest round in 2021) and has been aggressive with its geographic expansion. It is also now offering fixed-income products through a partnership with PIMCO. The new offering, Syfe Income+, will allow investors to select between two income allocation strategies, Income+ Preserve and Income+ Enhance, with expected yields of of 4% to 6%.
The backdrop of a high-rate environment and global macro uncertainties has created favorable conditions for fixed-income products, so Syfe’s timing makes sense — all roboadvisors, neobanks, and payments apps are rushing to offer nominal interest rate returns. The appetite for yield among investors remains high, with a risk-free rate of ~5% achieved through US short-term treasuries.
Singapore is an attractive place for foreign investment, with a wealth management sector full of tech-savvy consumers embracing digital investing solutions. The common thread that underpins the digital wealth space is a customer-centric interface, digital distribution channels, the flexibility to personalize the customer investing journey, and a basket of products at a fraction of the cost of traditional institutions with easy access to liquidity. Competitors include Endowus, StashAway, Bambu, and Kristal.AI, all doing something similar.
A recent EY survey revealed that among wealth management clients in Singapore, ~70% want to move money to another provider. While Singaporean interest in investing remains strong, 56% require more support and education to direct their investment decisions, citing that current platforms do not provide enough insights and quality content. Robots will help.
Curated News
North America News
⭐ 🇺🇸 Franklin Templeton Money Market Fund Launches On Polygon Blockchain - Businesswire, April 26, California
🇺🇸 Farther Surpasses $675MM AUM As Digitally Native RIAs Gain Traction - Investment News, April 20, New York
🇺🇸 iCapital® Launches Structured Investments Through The Envestnet Platform - Businesswire, April 25, New York
🇨🇦 CapIntel Announces Strategic Partnership with SEI - Businesswire, April 25, Toronto
🇺🇸 Morningstar Wealth Introduces Portfolio Analytics Enrichment From ByAllAccounts - PR Newswire, April 26, Illinois
🇺🇸 First Rate Acquires Wealth Management Platform And Partners For Compliance - PR Newswire, April 26, Texas
🇺🇸 Wealthtech Crossover Plotify Raises $12.5MM In Equity Financing - PR Newswire, April 20, New York
EMEA News
🇩🇪 Wealthtech LIQID Launches LIQID Income Strategy And LIQID Smart Start - The Paypers, April 21, Berlin
🇬🇧 Platform One Acquires FCA-Restricted SIPP Provider - Financial Times, April 26, London
🇬🇧 Regtech SteelEye Partners With Wealthtech Company Enfusion - Fintech Global, April 26, London
🇳🇴 Infront Doubles Down On WealthTech - Finextra, April 20, Oslo
Asia Pacific News
🇸🇬 StashAway Launches The First Cash Management Portfolio With Guaranteed Returns - Hubbis, April 25, Singapore
🇭🇰 Endowus Launches Hong Kong Digital Wealth Services - Finews Asia, April 26, Hong Kong
Blogs, Webinars, Podcasts
🇭🇰 Asia-Pacific Investors More Likely To Switch Wealth Managers, EY Survey Finds - Financial Times, April 24, Hong Kong
🇬🇧 Europe’s Digital Investment Platforms Raise ETF Demand - Financial Times, April 24, London
🇭🇰 The Rise of Digital Wealth Management in the Growth Markets of ASEAN - Hubbis, April 24, Hong Kong
Events & Reports
⭐ 🇬🇧 2023 Global Wealth Research Report - Ernst & Young, April 24, London
⭐ 🇺🇸 Fintech Nexus USA - Fintech Nexus, May 10 - 11, New York
🇺🇸 Wealth Management Edge - Informa Connect, May 21 - 24, Florida
🇺🇸 Finovate Spring - Informa Connect, May 23 - 25, California
🇬🇧 Innovation In Wealth Management - Professional Wealth Management, June 8, London
🇬🇧Private Banking & Wealth Management London Conference & Awards 2023 - Arena International, June 14, London
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