Despite Bitcoin's volatility causing major global fund management companies to steer clear, as its price continues to reach new historical highs, Australia's pension and wealth management company AMP has become one of the first large pension management companies in the country to invest in cryptocurrency products, allocating approximately AUD 27 million (USD 17.2 million) to Bitcoin futures.
AMP Senior Portfolio Manager Steve Flegg stated in a LinkedIn post this week that the fund 'took a risk and moderately allocated to Bitcoin' earlier this year. An AMP spokesperson indicated that the fund invests in Bitcoin futures and added that there are no plans for increased holdings.
Bitcoin surpassed AUD 100,000 for the first time last week, rising over 40% since Trump won the US presidential election in November. Trump has publicly supported cryptocurrencies and pledged to create a supportive environment for digital asset companies in the US.
So far, Australia's AUD 4.1 trillion pension system has shown little enthusiasm for investing in cryptocurrencies. Reserve Bank of Australia Governor Michele Bullock recently stated that Bitcoin has no role in the Australian economy, while regulators have previously warned that 'strong risk management controls' must be used when engaging in activities involving digital assets.
Australia's rapidly growing pension industry has been closely monitored for a range of issues, including valuations in unlisted markets, customer service, and investment fees. The industry undergoes an annual performance test aimed at eliminating poorly performing pension investment products. Earlier this year, dozens of pension investment products offered by AMP failed the test, with most of these products failing for the second consecutive year.
AMP Chief Investment Officer Anna Shelley commented in an email that the investment in Bitcoin futures reflects the 'structural changes' in the digital asset industry over the past year, including leading investment managers launching exchange-traded funds (ETFs) directly investing in Bitcoin and Ethereum.
"After our investment team and committee tested and carefully considered, we included a small-scale and risk-controlled position in digital assets through our dynamic asset allocation plan in May," she said, adding that this exposure accounts for approximately 0.05% of its total pension assets.
The Australian Prudential Regulation Authority declined to comment on AMP's investment in Bitcoin futures, instead citing a letter it sent to the financial industry in 2022.
Shelley stated, "While our super members benefit from this risk exposure, we fully understand the risks and volatility characteristics of this emerging asset class and will continue to manage our holdings cautiously, which is a small part of a highly diversified asset portfolio."
Article forwarded from: Jin Shi Data
