VanEck launches diversified ETF combining stocks, bonds and Bitcoin exposure

The Wealth Builder ETF, which VanEck has launched, is available for purchase by anyone possessing a brokerage account, consolidating the firm’s Wealth Builder model portfolios that advisers previously utilized via external platforms into a single offering.

This new ETF, trading on the NYSE under the ticker WBMO, allows investors to obtain exposure to a broad assortment of investments encompassing gold, bonds, stocks, and bitcoin through one single ETF purchase, according to VanEck. The firm, which manages approximately $244 billion in assets, is responsible for selecting the holdings, establishing the weightings, and rebalancing the portfolio. The fund holds assets such as global stocks, bonds, gold, and other real assets; its exposure to bitcoin is not direct, as WBMO itself does not possess any bitcoin. Instead, a Cayman Islands subsidiary, which is wholly owned, holds specific investments and gains digital asset exposure through exchange-traded products that either track bitcoin or directly hold it.

While the prospectus does not specify a particular bitcoin target, the subsidiary's exposure to these assets is generally limited to 25% of total assets at the close of each quarter, though this constraint applies across several different asset classes. Investors do not require a seed phrase, a wallet, or an exchange account to hold the portion related to bitcoin, nor can they exert direct control over that bitcoin holding.

The fund carries a gross expense ratio of 0.33%, which reduces to a net ratio of 0.26% following a 0.07% fee waiver, although the underlying bitcoin products incur their own associated charges. The structure of the allocation also moderates potential fluctuations; if bitcoin experiences a steep rise, WBMO will only capture a fraction of that increase, but the presence of bonds and gold is intended to mitigate some of the losses if bitcoin declines, even if it cannot prevent them entirely.

VanEck issued a caution in its announcement, noting that ETPs linked to digital assets can exhibit extreme volatility, and furthermore, some of these products are not registered under the Investment Company Act of 1940, meaning they lack certain protections afforded to investors.

In a related development, VanEck's other crypto-linked fund, NODE, increased its exposure to bitcoin ETPs from roughly 7% at the end of June to 16.8% by the end of September; however, NODE focuses on blockchain companies, unlike the diversified mix present in WBMO, illustrating how VanEck incorporates crypto into its investment vehicles.

Earlier this autumn, Matthew Sigel, who serves as VanEck’s Head of Digital Assets Research, commented on the risks posed by quantum computing to Bitcoin’s cryptography, stating, “It’s a risk,” and adding, “But the community has recognized the scope of the issue. There’s a lot of talent that’s now come together with a framework of how to upgrade the system…The upgrades don’t happen as fast because there’s no CEO who can tell the devs, ‘hey, do it now.’ There’s a governance process — it takes more time, it’s a little bit messier, but there are technological paths for quantum resistance, and I think you’ll see more of that over the next couple of years.” In preparation for potential future dangers, major corporations such as Blockstream and Coinbase had started developing security measures that are resistant to quantum computing. Moreover, a Bitcoin Security Consortium, which includes BlackRock, Fidelity Digital Assets, and Block, was established to finance open-source security initiatives, including proposals like BIP-360.

The initial publication of this post, "VanEck Launches All-in-One Wealth Builder ETF With Bitcoin Exposure," occurred on Bitcoin Magazine and was authored by Micah Zimmerman.