New Zealand's $350 Million Retirement Fund Gets Into Bitcoin

A New Zealand retirement fund has invested five percent of its assets into Bitcoin, Stuff reports.

Operated by wealth management firm New Zealand Funds Management, the KiwiSaver Growth Strategy Fund had $350 million under management as of December.       

KiwiSaver is a voluntary savings scheme for workers from New Zealand that allows them to contribute up to 10 percent of their paychecks. Employees typically get enrolled automatically when they start a new job.      

New Zealanders can choose among many KiwiSaver providers that best suit their needs.     

NZ Funds Management CIO James Grigor​ claims that those investors who have exposure to gold cannot dismiss Bitcoin:

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.

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Grigor’s firm has been investing in Bitcoin since October, but other KiwiSaver are not rushing to follow his suit. Booster’s David Beattie, for instance, claims that the cryptocurrency is too speculative for his liking:

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.      

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Pension funds are finally in the Bitcoin game     

Typically known for its aversion to risk, pension funds were among very few types of institutions that were reluctant to dip their toes into Bitcoin.

This changed in the second half of 2020 when even the most conservative players like insurance giant MassMutual couldn’t resist becoming part of the cryptocurrency bonanza.

In January, Grayscale CEO Michael Sonnenshein revealed that the largest cryptocurrency asset manager started seeing participation from pensions:

We’ve started to see participation not just from the hedge fund segment, which we’ve long seen participation from, but now it’s recently from other institutions, pensions and endowments.