The Frankfurt asset manager Union Investment plans to include such investments in other funds after a pilot test with Bitcoin certificates. This means that cryptocurrencies are increasingly reaching the mass market in Germany as well.
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Bitcoin is finding its way into more and more portfolios, including a few managed by Union Investment. “We are considering adding bitcoins in small amounts of no more than one to two percent to a handful of other funds for private investors,” said portfolio manager Daniel Bathe in an interview with Bloomberg News. This will be possible from the fourth quarter, but there is no fixed date yet.
At the beginning of this year, Union Investment included crypto assets in a mixed fund for the first time. These were Delta 1 certificates in the PrivatFonds Flexibel Pro. The fund may invest up to 1.0 percent in Bitcoin. According to Bathe, it is currently just below that.
Union Investment is the fund service provider for the cooperative banks in Germany. At the end of June, the company was managing 427.2 billion euros. One of the biggest competitors, DekaBank, has not yet offered any funds with corresponding admixtures for private customers.
“We are observing an increased interest of mixed fund managers in crypto assets,” said Kamil Kaczmarski, a consultant for financial service providers, at Oliver Wyman in Frankfurt. Many are likely to enter into various asset classes through certificates and other derivatives and are increasingly examining such investments for their portfolios.
Union Investment is the latest example of how investing in Bitcoin and other crypto assets is becoming easier in Germany. The S Broker of the Sparkassen has recently made it possible for its customers to invest in crypto currencies and blockchain technology. Investors can choose from around 40 certificates, ETFs and individual stocks.
Something is also happening on the institutional side. For example, since August, special funds with fixed investment conditions that are intended for professional investors have been allowed to invest up to 20 percent of the fund volume in crypto assets for the first time.
“A simplified entry into the market segment for institutional and private investors is a development that has been emerging for some time and is considered to be an important influencing factor for the Bitcoin price gains between autumn 2020 and the beginning of this year,” said Sören Hettler, analyst at DZ Bank belonging to the cooperative sector.
Warning of price losses
At the beginning of the year, the German financial regulator Bafin warned against crypto values in the form of direct investments or derivatives that track the price trend. “In all of these systems, consumers can suffer significant capital losses,” wrote the authority.
Hettler also urged caution. “An exposure to cryptocurrency is and remains risky, mainly because of the enormous price fluctuations,” said the analyst. “They can still be useful as an addition to a portfolio. Long-term investments in particular, for example in Bitcoin, have proven to be very lucrative in recent years. “
Protfoliomanager Bathe emphasized that Union Investment is not launching any new funds, but only adding such assets in small amounts. It is important that the risk profile of the respective fund does not change. At the same time referred to the advantages of cryptoassets. “Bitcoin are well suited for the diversification of portfolios because in the long term they often have no correlation to classic asset classes such as stocks or bonds,” said Bathe. (aa)