BlackRock and Ondo debut tokenized investment portfolios for a $9.8 trillion market

Buying a stock, a bond fund or an ETF has long been the only way most people build a portfolio. A partnership between BlackRock and Ondo Finance now offers a preview of something different: entire investment strategies wrapped into a single blockchain token that an investor can hold directly in a wallet, pushing the tokenization of investment portfolios past the single-asset stage it has mostly stayed in so far.

According to CoinDesk, BlackRock — the world’s largest asset manager — built three model portfolios for Ondo‘s Intelligent Portfolios product, each represented onchain as one token rather than a bundle of separate holdings an investor has to manage and rebalance individually.

Key takeaways

• BlackRock designed three onchain strategies that Ondo Finance turned into single tradable tokens.
• The tokens track high income, diversified growth and high growth strategies and can move freely between wallets.
• Model portfolios held roughly $9.8 trillion in assets as of June, according to Broadridge.
• Bitwise, Coinbase and Glider are building comparable tokenized portfolio products with automatic rebalancing.
• Industry voices expect AI paired with tokenization to eventually personalize portfolios around individual investors.

BlackRock and Ondo Finance Launch Tokenized Investment Portfolios

The core of the deal is simple: instead of buying and rebalancing several assets separately, an investor holds one token that represents the whole strategy. BlackRock built the underlying portfolios; Ondo turned them into tokens.

Portfolio Strategies Focused on Income and Growth

The three tokenized portfolios combine different assets into strategies built around high income, diversified growth and high growth, CoinDesk reported. According to Crypto Briefing, the products — High Income (BLKHIon), Diversified Growth (BLKDIGon) and High Growth (BLKGRWon) — are open to eligible non-U.S. investors and trade peer-to-peer across wallets, exchanges and decentralized venues including 1inch. Crypto Briefing also noted that under the arrangement, BlackRock licenses the portfolio construction and collects fees on the underlying funds it sponsors, while contractually owing nothing directly to token holders.

How Tokenization Enhances Portfolio Features

Putting the portfolio itself onchain, rather than just the assets inside it, gives it traits a traditional fund doesn’t have. According to CoinDesk, the token is capable of moving across wallets and platforms, remaining onchain-visible, and could potentially serve as collateral for loans or be integrated into other financial products.

Advancing Beyond Single Asset Tokenization

Most tokenization activity until now has focused on single assets — Treasury funds, private credit, stocks and ETFs put onto a blockchain one at a time. The BlackRock-Ondo products point to a different layer: bundling those assets into a strategy and tokenizing the strategy itself. Crypto investment firm Pantera described the shift, per CoinDesk, as moving “from single securities to onchain portfolios,” adding that for investors “the practical change is a reduction in the number of positions and rebalancing decisions they need to manage themselves.”

There’s a sizable business behind that idea already. According to Broadridge, model portfolios—ready-made fund combinations utilized by wealth managers—contained roughly $9.8 trillion in assets as of June. BlackRock’s Lisa O’Connor, global head of model portfolio solutions, framed the Ondo tie-up in those terms: “Tokenization creates new ways for portfolio strategies to be delivered through digital infrastructure,” she said in the announcement cited by CoinDesk.

Similar experiments are underway at other firms. In August, Bitwise launched Automated Token Portfolios in partnership with Coinbase and a16z-backed Glider, enabling eligible non-U.S. investors to track Bitwise-curated baskets of tokenized stocks, with Glider’s software handling automatic rebalancing to maintain target allocations. Ondo wraps exposure into one transferable token; Bitwise keeps individual tokenized stocks in the investor’s own wallet while software manages the mix — different mechanics pointing toward the same outcome: portfolio management becoming software that runs directly on blockchain-based assets.

Implications for the Future of Asset Management

What these products really signal is a potential change in portfolio contents, not merely purchasing methods. According to Tom Staudt, president and chief operating officer of ARK Invest, in remarks to CoinDesk, conventional portfolio models emerged at a time when everyday investors faced far fewer options—private equity, private credit and crypto were mostly inaccessible, while international markets posed greater access challenges. Tokenization could put more of those investments on the same digital rails he said.

Staudt also pointed to artificial intelligence as a multiplier: “It’s all great to have AI tell you what a perfect portfolio is, but if you can’t access the assets, it doesn’t really matter,” he told CoinDesk, adding that blockchain and tokenization are “clearly going to open up funds, strategies, asset classes and jurisdictions that are not currently available for everyone,” calling it “taking democratization to the next level.”

Ondo’s John Hoffman, head of portfolio products, described an even more automated endpoint in a June interview with CoinDesk: “Our end state will be portfolios that are professionally managed, real-time and adjusting to market circumstances and data changes.” Getting there, he said, will require a broader universe of onchain assets, prime-brokerage infrastructure and asset-management strategies that can run natively on blockchain networks.

Dan Romero, who serves as chief business officer at Stripe-backed blockchain Tempo, indicated to CoinDesk that he anticipates tokenization’s disruptive impact will lag behind stablecoins’ by several years. Stablecoins put cash onchain; tokenization is now putting more of the investable universe onchain, and combining the two, he said, lets developers build “really interesting new financial experiences” — comparing the moment to the rise of specialized neobanks once underlying payment infrastructure became easier to access.

Article produced with the assistance of artificial intelligence and reviewed by the editorial team.