New Zealand pension fund allocates 5% of assets to Bitcoin

The growth fund under New Zealand’s KiwiSaver scheme run by NZ Funds Management allocated 5% of the $350 million under its management to Bitcoin, according to Stuff.

In October 2020 the firm amended the funds’ investment mandates to invest in cryptocurrencies. Chief investment strategist James Grigor does not rule out Bitcoin appearing in a larger number of NZ Funds Management products.

“If you are interested in gold, you cannot ignore Bitcoin. Our KiwiSaver is built from equities and bonds, but other opportunities are emerging. We bought in October when it was $10,000; now the price is around $55,000.”, — explained the top executive.

Grigor saw the legitimisation of the first cryptocurrency in the rise in Bitcoin’s price. He cited Morgan Stanley’s recent decision to give clients access to Bitcoin funds.

Competitors at NZ Funds Management questioned the wisdom of adding the first cryptocurrency to clients’ pension plans. They cited high volatility and the lack of real-world use for it.

“Bitcoin in KiwiSaver is equivalent to gambling, not investing. I am surprised that they consider it a legitimate asset class,” said one of them.

NZ Funds expects the first cryptocurrency to continue rising. The firm said it is ready to move to “the next asset class” if it spots signs that the momentum is running out.

Note that in New Zealand, cryptocurrencies were equated with securities as far back as 2017.

In 2019, the country allowed wage payments in Bitcoin.

In the United States in 2020, pension plans offering investment in the first cryptocurrency included DAiM, as well as Bitwage with Gemini.

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