CRYPTANALYSIS - HOUSE VIEW ON KEY ALTCOINS

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41. CRYPTO ASSET FUND (Published: 14th Aug, 2017)
Overview
Crypto Asset Fund is an open-end, private fund formed for the purpose of acquiring, managing and divesting investments in a variety of crypto assets (all types of crypto currencies, tokens, tethers, and other present and future instruments related to them).  It also may make blockchain and other related investments, including in mining and related activities, as well as other investments in the crypto asset space, broadly defined.
It currently has three classes of shares: Class T (Trading), Class L (Lending) and Class I (Index). Class T makes all types of investments in the crypto space, Class L lends fiat and crypto currencies to other traders to allow them to leverage and short, and Class I mirrors the CAMCrypto30 index of the 30 largest cryptocurrencies by market cap.

CAMCrypto30 index
From the rules document, the index is rebalanced monthly, and it is solely based on market cap, without a ceiling/floor on market cap, index ratio, and trading volume.  Although they do not display the exact ratio of the index, it is expected that more than 70% of the the index are constituted of the top 10 cryptocurrencies.

Class I shares
By investing in this fund, it will mirror the CAMCrypto30 index and trade accordingly. The issue about this is that the portfolio performance will be greatly influenced by the major coins, while smaller coins, like those below the 15th ranking, would be negligible. This might not fulfil the purpose of diversifying. 
On the contrary, the fund might impose additional costs by holding a wide range of coins. Nowadays ICOs’ mania can easily push up the price significantly in a short period of time. However, it cannot hold long and the price will fall afterwards. Coins in lower ranking could shift frequently, so it brings up transaction costs without adding much value to the portfolio.

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