One of Australia’s large retirement funds, Rest Super is mulling the idea of investing in digital currencies as a means to diversify its portfolio.
The plans were unveiled at the company’s Annual General Meeting on Tuesday where the firm’s chief investment officer, Andrew Lill told members that digital assets will form an “important part” of its portfolio moving forward, however, he said the firm will proceed “carefully and cautiously.”
Most legacy investment funds are particularly cautious of committing users’ funds into the nascent and largely unstable cryptocurrency industry. This according to Lill will form the guiding force on how it approaches the growing industry. “It’s still a very volatile investment, so any allocation exposure we make to cryptocurrencies is likely to be part of our diversified portfolio as initially a fairly small allocation that may, over time, build,” he said.
Amidst the falling exchange rates stirred by the coronavirus pandemic, hedge funds, and asset managers have been finding it very difficult to pick profitable markets for their boatload of cash. Cryptocurrencies have come off as one of the best performing asset classes thus far this year, with Bitcoin (BTC), the flagship digital currency growing by over 208% in the year-to-date period according to data from CoinGecko.
The enticement of these nascent asset classes present in terms of Return-on-Investments (ROIs) forms the basis by which many institutional investors are placing extra emphasis on their suitability as a store of value.
“I do think that, in an era of inflation, it could be a potentially good place to invest,” Lill added.
Despite Lill’s bullish disposition toward investing in digital assets, a Rest Super’s spokesman added that the push is not such that it will be rushed.
“Certainly considering cryptocurrencies as a way to diversify our members’ retirement savings [but] will not be investing in the immediate future,” he said, adding “We are currently conducting extensive research into the asset class prior to making any decisions. We are also considering the security and regulatory aspects of investing in this class.”
Australia’s Rest Fund Crypto Push: Complement to a National Drive
The move by Australia’s Rest Super Fund to invest in digital assets in the near future is proving to become a complement to what seems like a national drive. Earlier in October, Coinspeaker reported that the country’s fifth-largest pension fund, Queensland Investment Corporation (QIC), which manages A$92.4 billion ($69 billion) in assets also unveiled its plans to invest in cryptocurrencies.
At the current rate, a fast-paced adoption by these fund managers is likely to trigger more institutional investors in the country to trail a similar path. The strides are purportedly being backed by the country’s legislature as a Senate Committee is pushing a number of regulatory proposals that will make the country a crypto hub like its Western counterparts.
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