New Zealand’s $350 million retirement fund exposes portfolio to Bitcoin
KiwiSaver, a voluntary savings scheme for New Zealand workers, has allocated five percent of its asset to Bitcoin.
The scheme is operated by the wealth management firm New Zealand Funds Management. As of December 2020, KiwiSaver had $350 million under its management. A five percent exposure could therefore be around $17.5 million.
James Grigor, CIO of NZ Funds Management claimed that Bitcoin can no longer be ignored. He said:
If you are happy to invest in gold, you can’t really discount bitcoin… Our KiwiSaver is majority built up through traditional assets classes, your bonds and shares, and they will always be the asset classes that compound over time to give people the best retirement they can get.
But while NZ Funds Management has been investing in Bitcoin since October last year, other asset managers are not in a hurry to embrace the digital asset. Booster’s David Beattie, for instance, believes that Bitcoin is still too volatile.
At this stage, we would say, ‘no’ because it’s an investment that doesn’t demonstrate risk-return properties that are acceptable from our point of view.
In the second half of 2020, MassMutual blazed the trail in the pension fund industry by investing in Bitcoin.