VanEck Just Launched a Diversified ETF Holding Stocks, Bonds, and Bitcoin. Is This the Best Way to Get Exposure to Crypto?

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Key takeaways

VanEck launched the Wealth Builder ETF holding stocks, bonds, and Bitcoin.
The fund allocates approximately 1.9% of its portfolio to the VanEck Bitcoin ETF.
The ETF suits conservative or beginner investors wanting modest crypto exposure rather than large holdings.

Thanks to exchange-traded funds, investors have a variety of options for accessing Bitcoin, the largest cryptocurrency by market capitalization.

An ETF segment that began with futures-based products and later evolved into pure spot funds has grown to include income-generating funds as well as ETFs that buffer against Bitcoin downside in exchange for capped upside participation.

A growing number of other ETFs that aren't crypto-dedicated are also including a sprinkling of Bitcoin. Add the newly minted VanEck Wealth Builder ETF to that list. Put simply, this rookie ETF provides exposure to many asset classes, including Bitcoin, under one roof. So it checks the convenience box, but whether its Bitcoin exposure is enough is a matter of individual investors' taste.

Evaluating the Bitcoin allocation in the new fund

The famous Bitcoin white paper just turned 18 years old, so if it's an adult now, 18 in investing terms is still really young. Likely due to that youth, professionals are mixed in their opinions regarding how much Bitcoin investors should hold in their portfolios.

After allocating to the building blocks of broad-based equity funds and individual stocks, it's recommended that new investors direct 1% to 2% of their investable capital to Bitcoin. On that basis, the new VanEck ETF is worth examining because it devotes 1.9% of its roster to the VanEck Bitcoin ETF, which provides spot exposure to the cryptocurrency.

Although the wealth builder ETF is actively managed, investors shouldn't expect its Bitcoin sleeve to grow much beyond 2%, as the issuer notes that 2% is the target. There's nothing wrong with that. Plenty of investors are likely to be happy with a Bitcoin flirtation, not a full-fledged committed relationship.

It also pays to note who this new ETF is most likely to appeal to. That audience is likely to be inexperienced investors, those apprehensive about conducting their own research, those seeking convenience, and market participants who simply want to keep things simple. In those contexts, modest Bitcoin exposure is applicable.

Alternative options for risk-tolerant investors

The VanEck Wealth Builder ETF is definitely a nifty addition to the ETF space, but it's not the best fund for risk-tolerant investors who want a bigger helping of Bitcoin. Some experts say that if an investor can handle the risk, a portfolio allocation of up to 10% Bitcoin could pay off over the long run.

Obviously, the wealth builder ETF doesn't meet that demand, and it's not intended to. Then there are market participants who simply want to own Bitcoin directly, whether through a digital wallet, on an exchange, or through a pure-play spot Bitcoin ETF. Those investors shouldn't lean on the rookie VanEck fund for Bitcoin exposure, either.

Putting it all together, the Wealth Builder ETF is a great tool for Bitcoin exposure for some investors, but those willing to take on more crypto risk and who expect larger Bitcoin allocations should look elsewhere.

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