Tokenized assets have the potential to expand investment horizons and challenge traditional models of portfolio management that rely on the efficient markets theory. The rise of index funds and passive investing has been driven by the belief that investors are rational, but behavioral psychology has shown the flaws in this assumption. The regulatory framework also favors established assets with long-term track records, limiting the inclusion of new asset classes. However, tokenization and blockchain technology offer a way to package and trade any asset, providing transparent and comparable data that was previously lacking. This could lead to a broader range of risk and return profiles in portfolios, challenging the dominant index-based approach. While this shift will take time, the use of artificial intelligence could hasten the adoption of tokenized assets. The potential impact on the trillion-dollar asset management industry is significant.



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