🚀 Jupiter Asset Management Blocks Crypto ETP Investment in UCITS Fund 🧨

Jupiter Asset Management's compliance team prohibited their team from investing in a cryptocurrency ETP in an Irish UCITs fund.

Jupiter’s compliance team has blocked investment in a crypto ETP, as per reports.

Jupiter Asset Management, a renowned UK-based fund management group, has made headlines as its compliance team blocked investors from having exposure to a cryptocurrency exchange-traded product (ETP) in one of its Irish UCITS funds. The reason for this surprising move? According to a report by the Financial Times, it was due to “divergent regulatory approaches in the EU.”

📉 Regulatory Roadblocks

UCITS funds, open-ended investment funds widely favored by European retail investors, face challenges when it comes to incorporating crypto investments. In Ireland, where Jupiter’s UCITS fund in question is based, investing in cryptocurrencies within UCITS funds is not currently allowed. This presents a hurdle for European fund managers who seek to include crypto assets in their funds but are constrained by differing regulations across the continent.

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Laurent Kssis, an expert on crypto trading and ETFs at CEC Capital, shed light on the situation, explaining, “The Commissioner in Ireland has been very clear about crypto investment vehicles such as ETFs and ETPs; they do not recognize Bitcoin or crypto as a qualified asset class.” Kssis further shared that a 2015 ETP filing was also rejected, emphasizing the ongoing stance of Irish regulators.

💼 Jupiter Asset Management: A Brief Introduction

Jupiter Asset Management manages equity and bond investments for both private and institutional investors. With a whopping $66.5 billion of assets under management, the firm holds significant influence in the financial world. Despite the absence of regulatory intervention or any impact on the fund, a Jupiter spokesperson revealed to the publication that the trade was made, identified during regular oversight, and subsequently canceled.

💼 UK Investors and Crypto Adventures in the Past

Jupiter Asset Management’s decision to block exposure to a cryptocurrency ETP within its UCITS fund comes in the wake of previous crypto ventures by UK-based institutions. Last year, Ruffer Investment Management revealed a remarkable profit of $1.1 billion in just five months from its Bitcoin investments. However, Ruffer decided to sell its Bitcoin holdings, as the firm believed that with the end of lockdowns, younger investors would be less focused on trading.

🌍 European Crypto ETP Market Overview

European investors can access a wide array of crypto ETPs in the market. Some of the major players in this space include 21Shares, CoinShares, WisdomTree, VanEck, Valour, Invesco, Hashdex, and ETC Group. However, it’s important to note that in January 2021, the UK’s FCA implemented a ban on the sale of derivatives and ETPs, citing potential harm to retail consumers. Institutional investors, on the other hand, can access crypto products through trusted names such as Goldman Sachs, ICAP, JPMorgan, and UBS.

💡 💰 What Do Investors Need to Know? 💸

❓ Q: Can investors in the Jupiter UCITS fund expect any regulatory changes in the future? 💬 A: Regulatory changes are always a possibility, and it’s essential to stay updated with the latest developments. While the current stance of Irish regulators remains unchanged, the landscape may evolve over time.

❓ Q: How can European retail investors access crypto ETPs despite regulatory challenges? 💬 A: While acquiring exposure to crypto assets through UCITS funds is difficult due to regulatory hurdles, European retail investors can explore alternative avenues such as direct investments in crypto ETPs or seeking out investment opportunities offered by institutions catering to retail investors.

❓ Q: What should investors consider when evaluating crypto ETPs? 💬 A: When considering crypto ETPs, investors should assess factors such as the fund’s objective, underlying assets, issuer credibility, fees, performance, and regulatory compliance. Proper due diligence is crucial in making informed investment decisions.

📈 Future Outlook and Investment Recommendations

The road to wider acceptance and regulatory alignment for crypto assets in the UCITS framework is still unclear. However, as the popularity and demand for cryptocurrencies continue to grow, regulatory frameworks might undergo necessary adjustments to accommodate these innovative assets.

Investors should stay informed, closely monitor regulatory developments, and consider diversifying their portfolios by including crypto investments through regulated channels. While risks are inherent in any investment, strategic allocation to crypto assets can offer potential benefits and opportunities for long-term investors.

📚 References:

1. Financial Times – Jupiter blocks crypto investment in its funds
2. Ruffer Investment Management’s Bitcoin profit
3. European crypto ETP providers
4. FCA ban on derivatives and ETPs
5. Cryptocurrency news on Google News

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