TechFlow news, on February 28, according to CoinDesk, Paul Brody, EY's global blockchain leader, said that tokenizing physical assets via blockchain could redefine portfolio management by creating daily, transparent price data for markets traditionally limited to a few asset classes.
Brody noted that modern portfolio theory stems from Eugene Fama's efficient market hypothesis of the 1960s. While this theory has flaws, the index fund strategy it spawned has become the default choice for pension and retirement account management. Currently, about 80% of institutional investors' portfolios are concentrated in stock and bond index funds, with alternative investment strategies accounting for only 15–20%.
The emergence of tokenized assets will expand the universe of investable assets, enabling investors to access asset classes and regions previously overlooked due to data scarcity or illiquidity. For example, tokenizing real-world assets such as Thai real estate, Nigerian oil leases, or New York City taxi licenses can generate continuous, transparent pricing data, allowing these assets to be compared on equal footing with traditional ones like U.S. equities.
Brody expects this transformation to take roughly ten years, including building broad portfolios of tokenized assets and accumulating 5–7 years of daily data records. However, the widespread adoption of AI-driven automated investment tools could accelerate this shift, making it faster than previous historical transitions in investment paradigms. EY will host its Global Blockchain Summit from April 1–3 to explore the role of digital assets in investment portfolios.
