Charles Schwab Investment Management releases a cryptocurrency investment research report, saying that even a small allocation can increase portfolio risk

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Gate News message: On April 8, the U.S. large brokerage Charles Schwab released a research report exploring approaches to investing in cryptocurrencies. The report notes that there is no “correct” fixed allocation ratio, and that the decision depends on the investor’s objectives, risk tolerance, and outlook. The report proposes two main investment approaches: a return-based method (considering expected returns, volatility, and correlations with other assets) and a risk-based method (focusing on the level of risk that adding cryptocurrencies would add to an overall investment portfolio). Charles Schwab said that even a modest increase in crypto asset allocation would increasingly make the portfolio’s performance attributable to crypto performance. In conservative, neutral, and aggressive portfolios, assuming Bitcoin’s annual return is 15%, the allocation ratios are approximately 1%, 6.6%, and 8.8%, respectively. Because Ethereum is more volatile, it has a smaller allocation ratio. The report says that cryptocurrencies can provide some diversification benefits to traditional asset portfolios.
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