Australian superannuation fund provider AMP Ltd. has invested A$27 million ($17.2 million) in bitcoin futures, a spokesperson for AMP told CIO. The figure amounts to about 0.05% of the firm’s A$57 billion in assets under management.
“Following testing and careful consideration by our investment team and committee, we included a small and risk-controlled position in digital assets through our Dynamic Asset Allocation program in May,” said Anna Shelley, AMP’s CIO, in a statement.
AMP Super manages the retirement investments of more than 1 million beneficiaries across Australia and New Zealand.
“The exposure, which currently represents around 0.05% of our total superannuation assets under management, recognizes the structural changes in the industry over the past year, including the launch of exchange-traded funds by leading international investment managers,” Shelley said in the statement.
In a LinkedIn post, Steve Flegg, a senior portfolio manager at AMP, said bitcoin has had a “barnstorming year” and added that “we generally thought that even though crypto is risky, new and not yet fully proven, that it had become too big, and its potential was too great, to continue to ignore.”
AMP is not the first institutional fund manager to make a cryptocurrency allocation. The State of Wisconsin Investment Board disclosed purchasing $160 million in bitcoin ETFs, also in May. Other pension funds, such as the Michigan Retirement System and the Jersey City Employees’ Retirement System, have also made or announced plans to make bitcoin allocations.
The price of the digital asset price has rallied to more than $100,000 in recent weeks, with investors expecting the incoming administration of President-elect Donald Trump to be friendly to cryptocurrency. Trump has named several individuals who are expected to think favorably about digital assets as members of his incoming administration, including Paul Atkins as chair of the Securities and Exchange Commission.
Bitcoin’s volatility means the asset is unlikely to become a staple of institutional allocator portfolios, but some funds could find niche opportunities. One pension fund in the U.K. allocated 3% of its portfolio to bitcoin.
“While our super members have benefited from the exposure, we fully appreciate the risk and volatility characteristics of this emerging asset class and will continue to carefully manage our holding, which is a fractional component of a highly diversified asset mix,” Shelley said in the statement.
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Tags: AMP, Anna Shelley, Bitcoin, Crypto, Superannuation