Schroders, which managed $1.1 trillion in assets as of June, announced it is working with Centrifuge to bring its strategy investing in emerging-market bonds to Solana.
According to CoinDesk, the London-based asset manager, which has a history spanning more than 200 years, is preparing to tokenize its Schroder International Selection Fund Emerging Market Bonds strategy. The project, the company’s first tokenization initiative on Solana, will represent fund shares backed by government and corporate bonds on the blockchain.
Schroders has managed emerging-market debt for more than 50 years and employs more than 40 investment specialists in the asset class. Centrifuge, which is providing the project’s technical infrastructure, hosts more than $750 million in tokenized assets on its platform.
What investment will token holders own a stake in?
The structure will operate through an intermediary fund that invests in the main fund. Rather than holding shares directly in Schroders’ Emerging Market Bond Fund, investors will hold tokenized shares in the intermediary fund that invests in it.
The underlying strategy invests in debt instruments issued by governments and companies in emerging markets. Returns vary depending on borrowers’ ability to pay, currency movements, and the economic conditions in the countries concerned.
On-chain funds move beyond cash-like products
U.S. Treasury bonds and money market funds led the first wave of growth in tokenized investments. According to data from RWA.xyz cited in the report, these products account for $14 billion of the $39 billion tokenized real-world asset market.
Anil Sood, Centrifuge’s head of strategy and growth, said emerging-market debt adds a different source of risk and return to on-chain investments. John Mensack, Schroders’ senior investment director for fixed income, said the firm aims to make the asset class more accessible by bringing these opportunities to the blockchain.
First on Solana, second stage in tokenization
In August, Schroders received regulatory approval in Ireland for the first tokenized share class of Schroders Onchain Active Returns (SOAR), a U.S. dollar money market fund. The new project on Solana expands this initiative to emerging-market bonds.
The company’s blockchain plans are thus adding a bond strategy with different economic and currency risks alongside its cash management products.
Not investment advice.