Key takeaways
- AMP committed $27 million to Bitcoin, marking Australia’s first super fund investment in the digital asset.
- The Bitcoin investment aims to improve returns and manage risk as part of AMP’s diversification strategy.
AMP has become Australia’s first superannuation fund to invest in Bitcoin. The company is confirmed As of Thursday, it had allocated about $27 million, or 0.05% of its $57 billion in assets under management, to the crypto asset, buying it at prices between $60,000 and $70,000.
Word started getting around after Steve Flegg’s LinkedIn post, in which the AMP portfolio manager said the firm had “taken the plunge” as Bitcoin ended a “childhood year”.
The wealth and pensions manager chose to add “a small and risk-controlled position” to its Dynamic Asset Allocation program after thorough testing and consideration by its investment team, Stuart Eliot, AMP’s head of portfolio management, said in a recent interview with Super Review.
The bitcoin investment is part of a broad diversification strategy to improve returns and manage risk, according to Eliot. AMP recognizes the growing trend of institutional investors entering the crypto market, as evidenced by the launch of numerous crypto ETFs over the past year.
AMP’s investment marks a milestone for super funds offering the public, according to Economist Richard Holden of the University of NSW, who noted that self-managed super funds already have $2 to $3 billion in crypto assets.
Caroline Bowler, CEO of Australian crypto exchange BTC Markets, supported the move, saying:
“The crypto market has become too significant to ignore. It’s not just about the buzz, it’s about the real potential that Bitcoin has as part of a diversified investment strategy.”
Industry-wide skepticism
Many other major funds, including AustralianSuper, Australian Retirement Trust and MLC, have expressed skepticism about direct crypto investment.
Superannuation fund AustralianSuper, the largest in Australia, said it would not follow AMP’s lead, but has explored blockchain investments.
The Australian Retirement Trust, which manages A$230 billion in assets, said it has no plans to invest in crypto or Bitcoin in the near future.
As with AustralianSuper and the Australian Retirement Trust, MLC does not currently invest in crypto, but is open to the possibility in the future. MLC chief investment officer Dan Farmer said it was a case of “not yet, rather than never ever” regarding crypto investing.
