Tokenbridge, a token aggregator and distribution platform aiming to streamline the wealth and fund management ecosystem, has introduced new features to support the construction, distribution and evaluation of tokenised model portfolios.
The firm writes that the new functionality is designed to modernise and simplify the model portfolio ecosystem by improving connectivity between tokenised and un-tokenised funds and securities, enabling greater automation. For institutions and distributors, Tokenbridge’s model portfolio token design significantly reduces the volume, complexity and cost of processes through several key features:
Greater connectivity with model portfolio providers: providers of model portfolios are able to issue smart contracts via the blockchain that dynamically manage the rules and characteristics of their models enabling wealth managers and advisers to far better match suitable model portfolios to their clients’ desired investment outcomes.
Greater connectivity between distributors and clients: distributors can execute their chosen model portfolio smart contract, creating a ‘personalised’ token on behalf of clients.
Constant portfolio evaluation: Tokenbridge’s infrastructure allows for the evaluation of the client’s portfolio against the selected model by comparing the issuer’s smart contract with the fund tokens (and untokenised units) in the consumer’s portfolio, so that rebalancing of the underlying (for example, for drift) is instantly reflected in the client’s portfolio.
The firm writes that, for investors, tokenised model portfolio functionality offers greater flexibility to choose or switch model portfolios and paves the way for ‘hyper-personalisation’, ensuring that their portfolios accurately reflect their investment preferences in both the tokenised and TradFi (untokenised underlying funds and securities) ecosystems. This is achieved by automating the acquisition of fund tokens (and untokenised units) to match the composition of their desired, customised model portfolio, the firm says.
Stephen Ashurst, CEO of Tokenbridge, says: “The fund ecosystem is ripe for modernization. Model portfolios are hugely popular and growing fast globally and for good reason as they provide investors with access to sophisticated diversified portfolios underlying constructed by experts. The historic complexity and expense of connecting such a broad ecosystem – from fund managers to model providers to distributors and investors – is vastly simplified with the intelligent use of fund tokens and smart contracts.
“Tokenbridge’s model portfolio infrastructure is designed to facilitate this change – giving broader access and a simpler, more effective and more personalised experience to the next generation of investors. As tokenization gathers pace, for wealth managers and advisers, our technology means that client portfolios can be easily linked to popular retail models and any changes to those models will be instantly reflected in the client’s portfolios. A tokenised funds ecosystem represents a natural next step for the industry, vastly improving current processes, benefiting participants across the ecosystem, and aligning with regulators concerned about access to advice and investor outcomes. Our model portfolio token design ensures that TradFi assets are also connected to the distributed ledger world, offering advisers and their clients the best cost advantages of today with their brand-name favourites”.
This announcement follows Tokenbridge’s full platform launch in late 2023, as well as the addition of several senior advisers to its advisory board.