Speaking at the Reuters Global Investment Outlook Summit in London, Ellis said there are a number of challenges with cryptocurrencies but that doesn't mean they're not investable.
"Conceptually digital currencies are an interesting thing," he said. "It’s not part of our investment universe today – it could be. If there is a CME future on bitcoin, it would be."
Futures market operator CME Group announced on Oct. 31 it would launch bitcoin futures in the fourth quarter.
"There is a big difference between a digital currency and a traditional currency...Traditional ones are supported by governments who have armies and tax men that can make people follow their rules, and digital ones don't," said Ellis. "But that doesn’t invalidate digital currencies at all."
Turning to emerging markets debt, Ellis said there appeared to be a mispricing across the sovereign credits, where investors were overly focused on broad indices.
"You’ve got a few countries where there is a real problem about getting paid your money back - like Venezuela and Lebanon. There are high yields but not if you're not going to get your money back, and (then) there's a whole bunch of countries that trade with sort of no premium," he said.
Extreme pricing was best highlighted during the summer when Russian government debt yields were trading below U.S. Treasuries, he added.
On other potential market mispricings, Ellis said upcoming European financial markets regulation, called MiFID II, will increase the number of companies trading at "significantly incorrect" valuations.
"Is transparency about what's going on in small and mid-cap stocks going to get materially worse? Yes. Is it going to create some what are inherently false markets which will hurt some inexperienced investors? Yes."
He said big stocks have far too many people covering them, a lot of whom don't add value, while small stocks don't have many analysts covering them, leading to a worse situation overall.
(Reporting by Maiya Keidan and Simon Jessop; editing by Mark Heinrich)
By Maiya Keidan and Simon Jessop