A (regulated) crypto fund, as more and more banks and other providers launch it, invests in crypto assets according to well defined criteria and may not deviate from these. The investment is managed via a separated account at a custodian (e.g. at a bank) and the respective management company may only use this within the predefined strategy. Typical models are 3% management fee and 20% profit participation.
A typical example could be a crypto fund that always invests into the 10 largest digital currencies by market size over the next 12 years.
The crypto and blockchain market is currently still in a very early phase and will experience many significant changes. Any promising investment strategy specified today may turn out to be unfavourable tomorrow.
With the corporate bond construct, INVAO has much more flexibility to adapt to the expected developments in the markets than any rigid fund structure.
IVO is even allowed to completely de-invest from all block-chain assets at times with a too high market risk to secure positions in USD or stable coins until the markets have calmed down again. If opportunities arise on other assets or strategies, IVO can take advantage of them as well.
The Financial Market Authority has therefore declared INVAO's financial product to be a bond because of its flexible investment strategy. The risk-adjusted and adaptable approach enables IVO to react to market changes.