Morgan Stanley’s Europe Opportunity Fund Files N-1A to Add Language on Investment in Spot Bitcoin ETFs
In Brief
Europe Opportunity Fund added language in an N-1A filing to allow investments in spot Bitcoin ETFs and may gain exposure under conditions.
Financial services company Morgan Stanley’s Europe Opportunity Fund has added language in an N-1A filing, to allow investments in spot Bitcoin ETFs submitted to the United States Securities and Exchange Commission (SEC). The fund may gain exposure to spot Bitcoin ETFs, stipulating that such exposure must not exceed 25% of the fund’s total assets.
The Europe Opportunity Fund has previously held the Grayscale Bitcoin Trust (GBTC) shares. Given the SEC’s approval for GBTC to transform into a spot Bitcoin ETF, adding such language ensures Europe Opportunity Fund’s alignment with the fund’s documentation regarding this investment.
Including this disclosure language by the fund could be interpreted as a risk mitigation measure if the fund acquires exposure to Bitcoin ETFs. Despite exhibiting positive performance, the fund has experienced modest inflows over recent years and has shown relative underperformance compared to the S&P 500 stock market index. Thus, Eric Balchunas, a senior ETF analyst at Bloomberg, suggests that this move might be part of a growth strategy for the fund.
“So it is interesting if you’re running this fund; it’s got to be tough because Europe doesn’t really have some of these names that you find in the U.S. that have just been the growth story. And so it might be this one just trying to look for a little kick, a little edge,” said Eric Balchunas. Regarding exposure, he expressed the belief that it would be surprising if it exceeded 2% of the fund’s total assets.
Mutual Funds Seek to Disclose Bitcoin Exposure
Mutual funds operate under stringent regulations, requiring comprehensive disclosures. This may explain why mutual funds are often the first to reveal their exposure to Bitcoin.
“So over the next couple of months, then we’ll see a bigger group of holders. Right now, the mutual funds make sense to see first, not because they added it first but because they have to report first,” said Eric Balchunas.
While exposure to Bitcoin may not align with the objectives of certain specialized funds, many fund managers would likely prefer to have the flexibility to explore the potential offered by the emerging range of ETFs. Consequently, this can be seen as a step in the ongoing integration of ETFs into the traditional financial infrastructure.
Adapting to market dynamics, Morgan Stanley’s Europe Opportunity Fund’s recent move reflects a calculated approach to explore opportunities and manage risks in the evolving financial landscape.
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
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Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at alisa@mpost.io
