In the semi-annual report filed with the SEC, the BNY Mellon Dynamic Value Fund says its lack of investment in shares of MicroStrategy, the largest institutional investor in Bitcoin, was one of the main reasons for its poor returns in the past half year.
The fund managers BNY Mellon Dynamic Value Fund presented their semi-annual report of returns to the United States Securities and Exchange Commission (SEC)). In it, they report that the returns obtained from September 2020 to February of this year were lower than those of their benchmark index, mainly due to having invested in gold and not in companies related to Bitcoin.
According to the report, one of the main reasons that affected the fund's performance in the last six months, from September 200 to February of this year, is the fact that it did not invest in MicroStrategy shares, when this company announced a significant purchase of Bitcoin (BTC), cryptocurrency market leader, and the value of its shares began to rise considerably.
In their report, the BNY Mellon fund managers detail that the fund's total performance was affected by not owning MicroStrategy shares.
“The fund’s performance was also affected by the decision not to own MicroStrategy, whose shares rose when it announced it had invested in bitcoin.”
The lack of investment in companies with a high exposure to cryptocurrencies such as Bitcoin is a fact that the managers of the BNY Mellon Dynamic Value Fund regret.
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More bitcoins, less gold
Another factor that the managers of the BNY Mellon Dynamic Value Fund highlight as having affected its performance is the “weakness in gold prices”, which also had a negative effect on the overall performance of the BNY Mellon ETF.
Thus, the fund's position in the company Alamos Gold, a Canadian multinational dedicated to gold extraction and mining, proved to be an obstacle to the fund's performance. Over the past 6 months, the value of the shares of this company, AGI, has fallen. it fell by 34%, from a value of CAD 13,08 (Canadian dollars) in September 2020, to CAD 8,36 at the time of writing this note.
MSTR, more than 330% in the markets
On the other hand, in contrast to the negative performance of Alamos Gold shares, MicroStrategy grew by more than 330% in the last 6 months. The company's shares, MSTR, went from a value of $150 in September 2020, to a value of $656 at the time of this writing, data from the company show. Trading ViewAt the beginning of February, MicroStrategy shares were worth $1.271.
Source: Trading View
MicroStrategy has invested nearly $2.200 billion in Bitcoin since August of last year, netting around 91.579 BTC to date. At the time of this investment, the price of BTC is around $57.300, bringing MicroStrategy's holdings to over $5.240 billion; a growth of over 130% in less than 1 year.
The company's CEO, Michael Saylor, confirmed that he will continue buying bitcoins this year, while the ETF.com portal assures that there are already around 88 ETFs that have significant investments in MicroStrategy.
Continue reading: MicroStrategy continues to bet on Bitcoin and transforms part of its reserve into BTC
