Blockchange Inc, the digital asset investing platform for professional wealth managers, and Arbor Digital, an SMA manager for RIAs on their journey to digital assets, today announced a new Separately Managed Account (SMA) option for digital assets. The True Digital Asset SMA™ is the first of its kind, offering a variety of actively managed strategies and a broad selection of asset choices that can be tailored to the growth and risk appetites of different classes of investors.
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Arbor Digital manages the SMA, leveraging Blockchange’s BITRIA Digital Turnkey Asset Management Platform to onboard clients and manage portfolio allocations, with all assets custodied by Gemini Trust Co. The institutional-grade solution enables RIAs to outsource the management of their client’s digital portfolios to Arbor Digital, who have specific expertise in the asset class.
“Vehicles like the Arbor True Digital Asset SMA simplify the journey for RIAs who want to engage with digital assets,” said Ric Edelman, Founder of the RIA Digital Assets Council and one of the nation’s most influential financial advisors. “Advisors need solutions like this that make it easy to add digital assets to client portfolios.”
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The Simplicity of a Trust or Fund with the Benefits of Full Asset Ownership
Financial advisors who want to expose their clients to digital assets today have several options. The simplest entry points are digital trusts and funds such as the Grayscale Bitcoin Trust (GBTC) or the Bitwise 10 Index Fund. However, while being easy to use, digital trusts can expose investors to premium risk (a divergence between the market price of shares of the trust and the value of the digital assets being held) and are frequently limited to a single asset. Funds tend to have higher fees, lockup periods, and lack the ability to customize portfolios based on individual investor goals and risk/reward profiles.
At the other end of the spectrum are Digital Turnkey Asset Management Platforms (DTAMPs) that enable advisors to actively manage portfolios with a wide selection of digital assets, without the downside of high fees or premium risk. With ownership of the underlying assets, investors also enjoy tax advantages and other benefits such as staking and lending and the ability to manage digital IRAs. Effective use of a DTAMP however requires that the advisor has experience with digital assets, and there is also effort required to onboard clients to the platform.
The Arbor True Digital Asset SMA represents a “sweet spot” solution for RIAs, delivering the benefits of a DTAMP without the need for expertise in digital assets or the responsibility for onboarding clients. These functions are outsourced to Arbor Digital who manage all aspects of the client’s digital asset journey. It marries the simplicity of a trust or fund with all the benefits of owning the underlying assets through a DTAMP.
