Bringing Risk-Managed Digital Assets to Institutional Investors
Since Bitcoin’s inception, the growth of the asset class has only been rivaled by that of the internet and the “Dot Com” era. So, why have fiduciaries and professional investors approached the asset class with trepidation? Following our conversations with hundreds of financial advisors, family offices, and institutions, we’ve identified a pattern; downside volatility and principal protection are rarely a focus within the community of early adopters and practitioners.
We began managing outside capital in the form of Separately Managed Accounts in 2019 with a dedicated focus on Risk-Mitigation, NOT Return Enhancement. Over time, the regulatory landscape has matured and the instruments available for gaining exposure to the asset class have evolved for the better. From our initial SMAs for fiduciaries, we created Risk-Managed Digital Asset Private Placements for accredited investors and institutions for Bitcoin, Ethereum, and DeFi. Now, we are proud to bring our Risk-Focused US Mutual Fund to market, the IDX Risk-Managed Bitcoin Strategy Fund (BTIDX).
Similar to the ‘Internet Boom’ in the late 90s and early 2000s, digital assets have been subject to Moore’s Law, with new developments and improvements in technology (protocols) happening on a daily basis. Our research and investment teams are deeply involved in blockchain technology, evaluating our internally managed data (nodes), auditing the source code (smart contracts) of protocols, and participating in the ‘prudent’ development of the ecosystem. The fiduciaries who partner with IDX are able to benefit from these insights, and intelligently participate in the growth of the industry.
The IDX Risk-Managed Bitcoin Strategy Fund (BTIDX) seeks to Harvest the Volatility of the asset class via a rules-based, risk-managed approach to owning CME Bitcoin Futures and publicly traded Bitcoin Industry companies.
The IDX Risk-Managed Bitcoin Strategy Fund (BTIDX) seeks to mitigate the risk-of-loss (downside capture) relative to a long-only (passive) exposure to the asset class.
The IDX Risk-Managed Bitcoin Strategy Fund (BTIDX) is a US Mutual Fund regulated by the US Securities and Exchange Commission, and unlike owning Bitcoin (BTC) directly, the IDX Risk-Managed Bitcoin Strategy Fund (BTIDX) can be owned in US brokerage accounts and US retirement accounts held at US custodians.
The Fund does not invest in bitcoin or other digital assets directly. The Fund does not invest in, or seek exposure to, the current “spot” or cash price of bitcoin. Investors seeking direct exposure to the price of bitcoin should consider an investment other than the Fund.
The Fund’s manager, IDX, believes that the IDX Risk-Managed Bitcoin Strategy may provide investors with total returns over time, while reducing the volatility and the large drawdowns associated with passively owning CME Bitcoin Futures. Historical volatility is not necessarily indicative of future volatility, and therefore changes in market conditions, and other factors, might result in the actual realized volatility and drawdowns of the IDX Risk-Managed Bitcoin Strategy Fund (the “Fund”) for any particular period to be materially higher. The return of the Fund for any given period might be materially different than the returns of Bitcoin or CME Bitcoin Futures depending on the allocation decisions made by the Fund’s manager in its efforts to implement the Risk-Managed Strategy.
In periods of waning Bitcoin momentum, our signals seek to avoid periods of “uncompensated risk” and reduces exposure.
In periods of positive, increasing Bitcoin Momentum, our signals seek to participate in periods of “compensated risk”, and increases exposure.
Distributed by Foreside Fund Services, LLC which is not affiliated with IDX Funds or IDX Advisors LLC. There are risks involved with investing including the possible loss of principal. Diversification does not guarantee investment returns or eliminate the risk of loss. Past performance does not guarantee future results. Investors should carefully consider the investment objectives, risks, charges and expenses of the fund before investing. To obtain a prospectus containing this and other important information, please visit the fund page to download a prospectus online or here. Read the fund’s prospectus carefully before you invest.
The BTIDX Fund actively invests in bitcoin futures contracts and other instruments that provide exposure to bitcoin futures. The Fund is a new mutual fund and has a limited history of operations for investors to evaluate. Additional risks associated with the Fund include, but are not limited to: Futures Risk: The Fund’s use of futures involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Investments in futures involve leverage, which means a small percentage of assets invested in futures can have a disproportionately large impact on the Fund. Concentration Risk: The Fund is concentrated in the Bitcoin industry. The Fund’s concentrated investment exposure involves risks different from, or possibly greater than, the risks associated with investing in a fund with exposure to a broader range of industries. The concentration risk of the Fund includes, but is not limited to, the potential for greater volatility and the potential for greater loss of investment capital than a diversified fund. The Fund may be susceptible to financial, economic, political or market events, as well as government regulation, impacting the Bitcoin industry. Fluctuations in the price of Cryptocurrencies, specifically Bitcoin and Bitcoin industry companies, often dramatically affects the profitability of the Bitcoin Industry and therefore potentially the Fund. Cryptocurrency Risk: Cryptocurrency (notably, Bitcoin), often referred to as “virtual currency” or “digital currency,” operates as a decentralized, peer-to-peer financial exchange and value storage that is used like money. The Fund may have concentrated exposure to Bitcoin, a cryptocurrency, indirectly through an investment in CME Bitcoin Futures and vehicles that the fund’s manager, in its sole and absolute discretion, determines to be Bitcoin Industry companies or investments. Cryptocurrencies operate without central authority or banks and are not backed by any government.
The COIDX Fund is a new mutual fund and has a limited history of operations for investors to evaluate. Additional risks associated with the Fund include, but are not limited to: Investment Concentration Risk: The Fund is concentrated in Commodity Futures and Commodity Industry companies. The Fund’s concentrated investment exposure involves risks different from, or possibly greater than, the risks associated with investing in a fund with exposure to a broader range of industries. The concentration risk of the Fund includes, but is not limited to, the potential for greater volatility and the potential for greater loss of investment capital than a diversified fund. The Fund may be susceptible to financial, economic, political or market events, as well as government regulation, impacting the Commodity industry. Fluctuations in the price of Commodities often dramatically affects the profitability of the Commodities Industry and therefore potentially the Fund. Futures Risk: The Fund’s use of futures involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Investments in futures involve leverage, which means a small percentage of assets invested in futures can have a disproportionately large impact on the Fund.
Other risks associated with investing in the funds include: Geographic Concentration Risk: The Funds may be particularly susceptible to economic, political, regulatory or other events or conditions affecting countries within the specific geographic regions in which the Fund invests. Liquidity Risk: Liquidity risk exists when particular investments of the Fund would be difficult to purchase or sell, possibly preventing the Fund from selling such illiquid securities at an advantageous time or price, or possibly requiring the Fund to dispose of other investments at unfavorable times or prices in order to satisfy its obligations. Leverage Risk: The value of your investment may be more volatile if the Fund borrows or uses instruments, such as derivatives, that have a leveraging effect on the Fund’s portfolio. Equity Market Risk: Equity markets can be volatile, and the prices of common stocks can fluctuate significantly. Derivatives Risk: The use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Foreign Investment Risk: Foreign investing involves risks not typically associated with U.S. investments, including adverse fluctuations in foreign currency values, adverse political, social and economic developments, less liquidity, greater volatility, less developed or less efficient trading markets, political instability and differing auditing and legal standards. Portfolio Turnover Risk: The frequency of the Funds transactions will vary from year to year. Higher costs associated with increased portfolio turnover may offset gains in a Funds performance. ETF Risk: ETFs are subject to investment advisory fees and other expenses, which will be indirectly paid by the Fund. As a result, your cost of investing in the Fund will be higher than the cost of investing directly in ETFs and may be higher than other mutual funds that invest directly in stocks and bonds. ETFs are listed on national stock exchanges and are traded like stocks listed on an exchange. Model and Data Risk: Given the complexity of the investments and strategies of the Fund, the adviser relies heavily on quantitative models and information and data both proprietary as well as supplied by third parties (“Models and Data”). Models and Data are used to rank securities and derivatives, provide risk management insights, and to assist in managing the Fund’s investments.
