Morgan Stanley Adds Bitcoin to 12 Mutual Funds' Investment Strategies

Morgan Stanley has filed with the U.S. Securities and Exchange Commission (SEC) to add bitcoin exposure to 12 of its mutual funds’ investment strategies. These mutual funds may invest in bitcoin futures as well as obtain indirect exposure to the cryptocurrency through investments in Grayscale Bitcoin Trust, the filing details.

Bitcoin Exposure for 12 Morgan Stanley Mutual Funds

Morgan Stanley Institutional Fund Inc., the asset management division of Morgan Stanley, filed a statement of additional information supplement with the U.S. Securities and Exchange Commission (SEC) on Wednesday. The purpose of the filing is to enable 12 of the investment bank’s mutual funds to start adding exposure to bitcoin.

The company explained that “Bitcoin Exposure” has been added to the “Investment Policies and Strategies” of 12 mutual fund portfolios, under “Other Securities and Investment Strategies” section.

The mutual funds that may start adding bitcoin exposure are Advantage Portfolio, Asia Opportunity Portfolio, Counterpoint Global Portfolio, Developing Opportunity Portfolio, Global Advantage Portfolio, Global Permanence Portfolio, Global Opportunity Portfolio, Growth Portfolio, Inception Portfolio, International Advantage Portfolio, International Opportunity Portfolio, and Permanence Portfolio.

The filing describes:

Certain funds may have exposure to bitcoin indirectly through cash settled futures or indirectly through investments in Grayscale Bitcoin Trust (BTC) (‘GBTC’), a privately offered investment vehicle that invests in bitcoin.

Furthermore, the filing details that each portfolio “may gain exposure to bitcoin and other assets by investing up to 25% of its total assets in a wholly-owned subsidiary of the fund organized as a company under the laws of the Cayman Islands.” In addition, “Each subsidiary may invest in GBTC, cash-settled bitcoin futures and other investments.”

Regarding the futures contracts based on BTC that some funds may invest in, the filing clarifies that “The only bitcoin futures in which a fund may invest are cash settled bitcoin futures traded on futures exchanges registered with the CFTC [the U.S. Commodity Futures Trading Commission].”

Recently, Morgan Stanley revealed that it will be offering wealthy clients access to three bitcoin investment funds. In February, the firm’s head of emerging markets and chief global strategist said, “cryptocurrencies are here to stay as a serious asset class.”