A Schroders emerging-market bond fund reaches Solana, wrapped in a separate fund

Schroders, a London fund manager with more than $1trn under management, has had one of its emerging-market bond strategies put on Solana, a public blockchain. Centrifuge, a firm that turns conventional funds into tokens, announced the launch on 4 November. The token gives investors exposure to the Schroder International Selection Fund Emerging Market Bond, which lends to governments and companies in developing economies. Centrifuge says it is Schroders' first deployment on Solana.

What matters is what sits underneath. "Until now, onchain fixed income has largely been built around cash and short-duration government securities," said Anil Sood, Centrifuge's chief strategy and growth officer, using the industry's word for on a blockchain. The figures bear him out. Of about $39.4bn in tokenized assets tracked by RWA.xyz, a data provider, more than $14bn sits in American Treasury debt and money market funds, reports Cryptoast, a French crypto news site. "Emerging markets debt introduces a fundamentally different source of risk and return," Sood said. Here returns depend on whether governments and companies in poorer countries pay their debts.

The token is not a share in the Schroders fund itself. Centrifuge's announcement speaks only of tokenized exposure to the strategy. Ledger Insights, a trade publication, and Cryptoast both describe a feeder: a separate fund that invests in the Schroders fund and whose own units are the tokens. Ledger Insights says the feeder is a cell of a British Virgin Islands fund run by Anemoy, Centrifuge's asset-management affiliate. The Luxembourg fund beneath it is not tokenized, it says.

Ledger Insights adds that investors pay in and cash out in USDC, a dollar stablecoin, with a $100,000 minimum for professional investors outside America. Centrifuge's announcement mentions none of these terms. Ledger Insights says Centrifuge has used the same approach for funds from Apollo and New York Life Investment Management, because it brings large managers onto blockchains quickly. For Schroders, said Marita Mcginley, its head of operations for Asia-Pacific and digital assets, the work makes its expertise "available to a new generation of investors".

Much is still unknown. Centrifuge's announcement does not say how much money has gone into the token, or what investors pay in fees. Even the size of the fund beneath it is unsettled: Ledger Insights puts it at $2.3bn and Cryptoast at about $2.2bn, and the announcement gives no figure. Coverage so far comes only from crypto and trade publications.