AMP Becomes First Super Fund to Allocate Part of its Portfolio to Crypto

AMP, one of Australia’s leading superannuation funds, has allocated $27 million of its portfolio to Bitcoin, making it the first major super fund in the $4 trillion retirement savings sector to embrace the often-volatile cryptocurrency market.

AMP’s move into the digital asset sector comes despite the critical views from several quarters, including the Reserve Bank of Australia’s Governor Michele Bullock, who believes cryptocurrency lacks a rightful place in the Australian economy.

In an interview with the Australian Financial Review, AMP’s Chief Investment Officer, Anna Shelley, said that the Bitcoin purchase represents 0.05% of AMP’s impressive $57 billion under management.

AMP Adopts Bitcoin for Diversification

Shelley attributed the move to a diversification strategy informed by AMP’s dynamic asset allocation process, which recognized Bitcoin’s significant momentum and sentiment in the market.

The pivot comes amid Bitcoin’s recent surge past the $100,000 mark, bolstered by a market bull run following Donald Trump’s re-election and his administration’s crypto-friendly stance.

Steve Flegg, AMP’s Senior Portfolio Manager, shared on LinkedIn that the fund had “taken the plunge,” citing the cryptocurrency’s growth and potential as too significant to overlook despite its risks.

The move has stirred varied reactions within the industry.

While AustralianSuper disclosed its focus on blockchain technology and indirect investments in companies leveraging this technology, it confirmed no current plans to directly invest in cryptocurrencies.

Similarly, representatives from Australian Retirement Trust and retail super giant MLC have shown cautious interest but no immediate plans to follow in AMP’s footsteps, per the AFR report.

AMP claimed that its crypto venture remains within conservative risk boundaries.

🚨 NEW: Australian retirement fund AMP invests $27m into #Bitcoin

They $57B AUM, and are the first domino to fall in a $4T industry in Australia! pic.twitter.com/1FrBES81IM

— Julian Fahrer (@Julian__Fahrer) December 12, 2024

Shelley said that while the current allocation is at the upper limit for this asset class, the fund will continue to manage its holdings prudently.

At the customer level, those with investments in AMP’s balanced and growth options are likely to see the most exposure to Bitcoin.

While conservative funds may have minimal allocations, the potential benefits could be significant, notwithstanding the acknowledged risks and volatility associated with cryptocurrencies.