Tokenised funds could reach US$600 billion of assets under management (AUM) by 2030, according to research by Boston Consulting Group in a study with fund manager Invesco.
That figure would represent 1% of total AUM for mutual funds and ETFs.
In a whitepaper called ‘Tokenized funds: The third revolution in asset management decoded’, the firms say fund tokenisation offers the potential to create billions of dollars in value for both financial institutions and end investors.
Tokenised funds have garnered more than US$2 billion in AUM.
“We see a pattern of growing investor demand in the tokenised funds space,” said David Chan, a partner at Boston Consulting. “Over the coming period, we expect that trend to continue, especially when regulated on-chain money such as regulated stablecoin, tokenised deposit, and central bank digital currency (CBDC) projects materialise.”
The whitepaper highlights that tokenised funds are witnessing a potential investment demand of approximately $290 billion, with the prospect of trillions more as traditional financial institutions such as asset managers and wealth managers embrace on-chain money adoption.
The surge is credited to the unique opportunity for these institutions to attract new investor pools, protect existing ones, and enhance business offerings with tokenised funds. There will also be innovative fund distribution opportunities through secondary tokenised brokerage and embedded investing. Managers will be able to enhance their distribution models, use smart contracts to tailor fund composition, and create hyper-personalised portfolios, the research says.
“On-chain money introduces two important features – programmability and atomic settlement with tokenised assets – which serves as a catalyst for growth in tokenised funds” said Alexandre Tang, head of institutions, APAC at Aptos Labs, a blockchain firm which also backed the research. “Once up and running, tokenised funds can offer advantages such as 24/7 secondary transfers and fractionalisation, a lower threshold for investing, and instant collateralisation if regulatory guardrails are put in place.”
Ken Lin, head of Hong Kong and Southeast Asia intermediary business at Invesco, added: “Wealth and asset managers are navigating a changing technological landscape in how funds are distributed. The establishment of regulatory guidelines and global standards can help create a solid foundation for a frictionless, globally interconnected industry.”
Chan added that markets worldwide, including Asian financial centres like Hong Kong, are accelerating efforts to capture the opportunity. This includes initiatives to actively promote real-world asset tokenisation and develop a digital money ecosystem, such as Project e-HKD+ and Project Ensemble launched by the Hong Kong Monetary Authority.