Fidelity to add bitcoin exposure to asset-allocation funds

A little more than a month after FIdelity launched its own bitcoin ETFs in Canada, the firm has announced plans to give even more investors exposure to them.

The firm is planning to add a modest allocation to Fidelity Advantage Bitcoin ETF within its Fidelity All-in-One Growth ETF and Fidelity All-in-One Balanced ETF. The firm said it is also adding a small allocation to the bitcoin ETF within the corresponding mutual-fund versions of the all-in-one investment ETFs.

“The decision to add a small allocation to Fidelity Advantage Bitcoin ETF within the funds in the All-in-One suite was made for its diversification benefits with the potential to improve risk-adjusted returns going forward,” the firm said in a release.

Because of the added crypto allocation, the firm said that it will update the risk ratings of its all-in-one growth ETF and its corresponding mutual fund version on or about January 21, 2022:

Since the introduction of the world’s first-ever bitcoin ETF in Canada last year, investment fund providers in Canada have introduced a slew of new ETF products that not just provide exposure to bitcoin but also to ether. Other products have also been introduced to provide multi-crypto asset exposure, as well as offer covered-call exposure to cryptocurrencies.

Over the course of 2021, Canadian investors poured $5.97 billion into crypto-asset ETFs, according to the most recent Canadian ETF Flows report from National Bank.

“The inflows into crypto-asset ETFs were enormous right out of the gate, pausing only briefly after a major (but typical) bitcoin price meltdown in the summer months,” the report said. “We find flows of crypto-asset ETFs are highly correlated with the prices of bitcoin and Ethereum, both of which are famously volatile and extremely risky.”