BlackRock has offered a glimpse into the future of asset management by partnering with Ondo Finance to package professionally constructed investment strategies into individual blockchain tokens through Intelligent Portfolios. The strategies combine various assets into high-income, diversified-growth, and high-growth portfolios. Rather than buying and rebalancing underlying investments individually, investors can hold a single token representing the entire strategy.
While mutual funds and exchange-traded funds have bundled investments for decades, placing an entire portfolio onchain introduces distinct characteristics. These tokenized portfolios can move between wallets and platforms, remain visible onchain, and potentially serve as collateral for borrowing or integrate with other financial products. This marks a shift from simply tokenizing individual stocks, bonds, and funds to creating onchain portfolios that reduce the number of positions and rebalancing decisions investors must manage.
The model portfolio market is substantial, holding approximately $9.8 trillion in assets as of June, according to Broadridge data. Industry participants see tokenization as a new distribution channel for these strategies. Lisa O'Connor, BlackRock's global head of model portfolio solutions, noted that tokenization creates new ways to deliver portfolio strategies through digital infrastructure.
Other firms are exploring similar approaches. In August, Bitwise introduced Automated Token Portfolios in collaboration with Coinbase and Glider, allowing eligible non-U.S. investors to follow Bitwise-designed portfolios of tokenized stocks while keeping the underlying assets in their own wallets. Meanwhile, industry executives suggest that tokenization could eventually expand the types of assets accessible to everyday investors, including private equity, private credit, and crypto assets.
Proponents point out that combining tokenization with software and artificial intelligence could eventually allow for portfolios tailored to individual goals, risk tolerances, and tax situations. However, achieving fully automated, real-time portfolios that adjust to market conditions will require further development, including a broader universe of onchain assets, prime-brokerage infrastructure, and native blockchain execution strategies.
