PBI’s monthly round-up of developments in private banking and wealth management technology
Cryptocurrency index fund opens to investors
Cryptos Fund, which passively tracks the CCI30 cryptocurrency index and says it enables diversification of cryptocurrency risk, has become available to investors.
Cryptos Fund is registered as a corporation in the Cayman Islands, and as a limited partnership, Cryptos Fund (US), in the US.
The business claims to be the only “regulated fund offering a passive index tracking investment strategy on cryptocurrencies”, free of performance fees.
Carlo Scevola, principal at Cryptos Fund, commented: “Cryptos Fund was initially created as a private investment vehicle.
“I first bought Bitcoin in 2011, and when its value became substantial I wanted to diversify into other cryptocurrencies with a rigorous scientific approach. There was no suitable option available, so I created my own fund.”
The CCI30 index aims to hedge against cryptocurrency risk and maximise returns in a balanced portfolio. The fund replicates the CCI30 index by passively investing in the components of the index of the 30 largest cryptocurrencies by market capitalisation.
A minimum investment of $100,000 is required to enable investor participation in the fund. While no performance fees are charged, an annual management fee of 0.99% is levied.
Scevola added: “No single investor can realistically own multiple cryptocurrencies directly. It requires time and experience to buy 30 different cryptocurrencies and keep the portfolio balanced.
“There are also technical and security requirements that only a dedicated professional structure can meet. Through Cryptos Fund, anyone can gain exposure to the main cryptocurrencies while reducing the volatility of the investment.”
Cryptos Fund was founded by Igor Rivin, a mathematics professor at Temple University, Scevola, an economist and investor, and Jeff Zorn, a global security expert.
Rivin said: “Cryptocurrencies are not correlated with other asset classes, [making] Cryptos Fund the perfect vehicle for adding diversification to a portfolio. The fund can also be viewed as a safe vehicle for storing capital.”
Cryptos Fund is currently only taking subscriptions from non-US investors. It will be made available to investors in the US on completion of the regulatory process.
Online retailer enters robo-investment space
US online retailer Overstock.com has launched a new robo-adviser platform in collaboration with tZERO Advisors.
The new platform is available within the retailer’s FinanceHub and will charge fees of $9.95 per month. It will offer investors exposure to various pre-established adaptive dynamic portfolios that align with their risk profiles. It will also enable investors to create tailored combinations of these portfolios.
The platform’s adaptive dynamic portfolios were developed based on dynamic market factors using FusionIQ algorithms and scoring systems.
Overstock founder and CEO, Patrick Byrne, said: “This service introduces robo-advising investment management services to our millions of customers, and continues Overstock’s commitment to bridging Wall Street and e-commerce.”
InvestCloud partners with Finworx on AI personalisation
Fintech business Finworx has become the latest startup to use the InvestCloud Innovation Center in Los Angeles.
Finworx is developing an AI-driven communications platform as an app for the registered investment adviser (RIA) market at the InvestCloud Innovation Center.
The technology from Finworx uses machine learning and natural language processing to create personalised communications for RIA clients. It does this through Finworx360, a behavioural risk survey that guides communications tailored to four distinct persona segments, based on attitudes to risk and behavioural biases.
Finworx will have access to work space, mentors from InvestCloud who will assist in building the app, and access to the full InvestCloud technology stack. Once launched, the app will also be available to all of InvestCloud’s 670 clients via the InvestCloud App Store.
Jeremy Floyd, CEO at Finworx, said: “Complete personalisation is the future for communicating with customers across all industries. The wealth management sector is certainly no exception – yet many firms struggle to implement effective persona-based communication strategies.
“The app we develop at the InvestCloud Innovation Center will enable wealth management firms of any size to quickly and easily segment investors by persona, tailor individual communications and help advisors drive their clients to specific objectives,” Floyd added. “It will achieve a whole new level of client interaction, improving overall service and increasing brand loyalty.”
TD Ameritrade Institutional’s platform to streamline investment management
TD Ameritrade Institutional has launched a new platform, Model Market Center, to offer registered investment advisers (RIAs) access to third-party investment models in one place.
The platform includes investment models from Goldman Sachs Asset Management, Russell Investments, State Street Global Advisors, Wilshire Associates, WisdomTree Investments, Anchor Capital Advisors, CLS Investments, and Cambria Investments.
The models currently available on the platform include ETFs and mutual funds. The company is also planning to include individual stocks and other securities at a future date. The business will use its trading and portfolio management technology, iRebal on Veo, to execute these models.
RIAs will be automatically communicated about changes as providers update their investment models.