Nearly nine out of 10 (87%) of institutional investors and wealth managers surveyed believe digital assets have an important role to play in diversified investment portfolios, according to the latest research by London-based Nickel Digital Asset Management.
The research found, that half (50%) said digital assets should represent a moderate portion of portfolios.
According to the research, there is a growing mainstream acceptance of digital assets.
The study was conducted with institutional investors and wealth managers in the US, UK, Germany, Switzerland, Singapore, Brazil, and the United Arab Emirates who collectively manage around $816 billion in assets.
It found that 23% surveyed, believe digital assets should only represent a small part of portfolios while 16% say they should form a significant part of portfolios.
“Around 10% questioned said digital assets should only be included in diversified investment portfolios for specific investment strategies.
“The acceptance of the role of digital assets in diversified investment portfolios shows how institutional investors and wealth managers’ views are changing, and that is reflected in forecasts of the launch of new digital asset funds.
“Nearly two out of three (63%) questioned expect a rise in the number of new funds focusing on digital assets and cryptocurrencies over the next 12 months, with 24% forecasting a dramatic increase. Just 6% expect a slight decrease in the number of funds in the next 12 months,” it said.
Anatoly Crachilov, CEO and Founding Partner at Nickel Digital, said: “The recent strong performance of digital assets highlights the role they can play in diversified investment portfolios, underlining the renewed interest in the asset class from institutional investors and wealth managers.
“We have no doubt that the SEC’s approval of Spot Bitcoin ETFs has played a role in the acceptance of digital assets as the barriers of inclusion have been dramatically lowered.”
Meanwhile, another survey of global institutional investors and wealth managers holding assets of €107 billion under management commissioned by Managing Partners Group (MPG) found that nearly two out of three (64%) professional investors predict investment in funds focusing on Life Settlements will rise over the next five years.
According to a survey, demand for the asset class is being driven by life settlement fund performance – fund managers specialising in life settlements have consistently generated high single-digit annual returns, and current market pricing delivers an annualised yield of 12%.
However, the sector is also being driven by rising numbers of life insurance policyholders choosing to sell their policies at a discount to their maturity value, yet higher than the surrender value, creating an increasing supply of Life Settlements that are institutionally traded through a highly regulated secondary market.
The survey revealed that around 86% of investors surveyed believe more wealth managers, pension schemes, and other professional investors will invest in the asset class for the first time as a result. Just under one in ten (8%) say they do not expect more first-time investors in Life Settlements, while 6% were unsure.
“The main reason for the rise in several life insurance policyholders cashing in policies identified by the research is the rising cost of long-term care in the US followed by the increasing ageing population,” it said.
* Maleke is the content editor of Personal Finance.
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