LPL rolls out blockchain separately managed account

LPL rolls out blockchain separately managed account
Separately managed account invests in stocks of companies that use the distributed ledger system.
JUN 18, 2018
LPL Financial has rolled out a new blockchain strategy separately managed account that LPL's advisers can offer their clients or use to build client portfolios. Blockchain is the driving force behind bitcoin and many other cryptocurrencies, but there are no cryptocurrencies in the strategy. Instead, the separately managed account invests in companies that use the distributed ledger system as a business strategy. BP, for example, is the separately managed account's top holding. The blockchain connection: BP is part of an energy consortium developing an energy trading platform that will use blockchain to keep trading records. It also invests in healthcare companies, such as Aetna, another of the SMA's top holdings, that are using blockchain to link payers, providers and patients. LPL says that the blockchain strategy is a way to exploit an exciting new technology, although new technologies can entail big risks as well. And the use of blockchain by Aetna and BP may not affect their primary businesses — health and energy — a great deal. Several blockchain-themed exchange-traded funds are already on the market: Amplify Transformational Data Sharing ETF (BLOK), First Trust Indxx Innovative Transaction & Process ETF (LEGR), Innovation Shares NextGen Protocol ETF (KOIN), RealtyShares Nasdaq NextGen Economy ETF (BLCN) and REX BKCM ETF (BKC) all started trading this year. Results have been mixed, to say the least. Since inception, returns on blockchain funds have varied from minus .06% for the RealtyShares offering, which made its debut on Jan. 16, to 4.04% for the Amplify ETF, which began trading the same day, according to Morningstar Direct. And bitcoin no longer has the cachet it used to. Bitcoin Investment Trust (GBTC), which rocketed 1,557.21% in 2017, has fallen 44.52% this year — although it does have more than 1,000 competitors in the cryptocurrency market.

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