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Alternative Market Briefing

State Street survey finds most institutions bullish on digital assets

Thursday, December 12, 2019

Laxman Pai, Opalesque Asia:

A survey of US asset managers and asset owners conducted by State Street Corporation predicts the continued prevalence of digital assets.

Digital assets continue to come a long way in gaining credibility among institutions, with only six percent of survey respondents reporting that they have no digital assets-related investments and no plans to invest in the next year, it said.

"38% will increase their allocation and 45% will maintain the same allocation. More than two-thirds (69%) of the largest firms plan to boost allocations of this asset class," it said.

45% say the tokenization of traditional assets will be a massive disruption to the market within the next five years. However, 55% say tokenized assets' inherent risks are too great for widespread institutional adoption.

Respondents cite myriad benefits of tokenization including improvement of risk management (62%) and transparency (55%), enhanced security (55%), and democratization of investing for retail investors (36%). Only 4 percent see no benefits from tokenization.

Bright future for semi-transparent ETFs

State Street survey also reveals a bigger role in the industry for semi-transparent active ETFs.

Given the more supportive regulatory stance the Securities and Exchange Commission (SEC) has recently taken toward semi-transparent active ETFs, many respondents now see a much bigger role for these vehicles in the market.

Nearly half (47%) say semi-transp......................

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