US financial institution BNY Mellon, the world’s largest custodian and asset service company, said that the recent results from one of its exchange traded funds (ETFs) were largely affected by the lack of contact with companies investing in bitcoin.
The BNY Mellon Opportunistic Small Cap (DSCVX) fund grew by 35% from 1 September 2020 to 28 February 2021, losing ground to the Russell 2000 Index, which gained almost 41.7% during the same period.
Documents filed with the US Securities and Exchange Commission show that the company regrets not buying shares in the pioneering business intelligence company MicroStrategy (MSTR), which invested billions in bitcoin last year and has since grown to over $ 4.8 billion. Deposit status:
“The fund’s performance was also affected by the decision not to own MicroStrategy, which went up when it announced it had invested in bitcoin.”
The document also noted that the placement of the fund in the gold mining company Alamos Gold “made it difficult to work, as the company’s shares were affected by low gold prices.”
According to ETF.com, 88 ETFs are currently affected by MicroStrategy, including the sixth largest performance fund for 2021 to date, the Amplify Transformational Data Sharing ETF (BLOK), which is heavily dependent on crypto firms and is the largest single owner of the 5. 20% of the MSTR portfolio is invested in micro-strategies.
On average, US ETFs allocate 0.57% of the capital to MicroStrategy.
Since MicroStrategy announced its first Bitcoin investment in August 2020, it has raised $ 2.2 billion in Bitcoin, with the company’s cryptocurrency value growing by 120%.
During the same period, the MSTR price has increased 385% from $ 135 to $ 655 at the time of writing. In early February, MSTR traded at record levels above $ 1,270.
MSTR / USD from August 2020: TradingView
Small cap ETFs BNY typically invests at least 80% of its assets in stocks with a low market value from the Russell 2000 index. Some of the fund’s largest commitments include North American Airlines SkyWest, Cloudera’s enterprise cloud provider and Acadia Healthcare. Approximately 23% of investments are in the industrial sector, 17.5% in healthcare, 15.9% in technology and 14.2% in financial services.
After opening trade in 2020 at around 27.5%, DSCVX plunged to a low level of $ 16 during March when the economic impact of coronavirus became clear globally. Since then, the fund’s price has doubled to over $ 37.
While MSTR was unfortunately not open to an opportunistic fund with a low net worth, BNY Mellon invested heavily in the cryptocurrency sector, leading a $ 133 million round of funding for Fireblock’s Series C institutional crypto portfolio last month.
In February, BNY Mellon also announced plans to roll out Bitcoin cache services.