BlackRock and Ondo launch tokenised portfolios

BlackRock and Ondo Finance are bringing professionally composed investment portfolios to the blockchain for the first time. Through the new Ondo Intelligent Portfolios, eligible investors outside the US can gain access to three BlackRock-developed strategies, each packaged as a single tradable token. This makes portfolio strategies that are normally available only through traditional brokerage accounts and fund structures accessible via crypto wallets, exchanges and DeFi applications.

In brief:

• BlackRock and Ondo launch three investment portfolios as tradable tokens on the blockchain.
• The portfolios are intended for eligible investors outside the US, in permitted jurisdictions.
• Each token offers exposure to a BlackRock ETF portfolio strategy in a single instrument.

Three strategies available as tokens

The first three portfolios are named BLKHIon (Ondo High Income), BLKDIGon (Ondo Diversified Growth) and BLKGRWon (Ondo High Growth), all three developed by BlackRock specifically for Ondo. This marks the first time that eligible investors can gain exposure to such BlackRock ETF portfolio strategies through a single token.

Ondo describes Intelligent Portfolios as a new category within the tokenisation market: composed investment portfolios that exist as a single transferable token on the blockchain. The tokens offer features such as automatic rebalancing, full transparency and integration with DeFi applications.

BlackRock sees opportunities in digital distribution

Lisa O’Connor, global head of the Model Portfolio Solutions team at BlackRock, says that tokenisation creates new ways to offer portfolio strategies through digital infrastructure. According to her, the Ondo Intelligent Portfolios show how existing approaches to portfolio management can become accessible to investors through new technological channels.

As previously became clear from BlackRock’s interest in digital assets, the company is firmly committed to integrating traditional financial products with blockchain technology. Ondo states that the infrastructure is now ready for other major financial institutions to bring their asset allocation expertise to the blockchain.

Available only outside the US

The portfolios are exclusively accessible to eligible investors outside the United States, in jurisdictions where this is permitted. They can use the tokens via existing crypto wallets, exchanges and DeFi applications, without the need for a traditional brokerage account or fund structure.

According to Wu Blockchain, citing reporting by the Wall Street Journal, this is the first time that BlackRock’s custom ETF portfolio strategies become available as tradable tokens on the blockchain.