While most Australian super funds seem to be unaware that cryptocurrency even exists, Rest Super has officially become the first superannuation fund in Australia to demonstrate interest in gaining exposure to the 1.8 trillion dollar crypto market.
During Rest Super’s annual general meeting late last year, the firm’s chief investment officer (CIO), Andrew Lill, told members that the company views crypto assets as an “important part” of its portfolio heading into the future, stating that:
“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.”
Lill went on to add that offering members access to crypto and associated blockchain technology could potentially provide a “stable source of value” in a time where investors are using crypto assets like bitcoin as a hedge against fiat-based inflation.
“I do think that, in an era of inflation, it could be a potentially good place to invest,” he said.
Following further investigation from DMARGE, Rest Super CEO Andrew Lili tempered the excitement of crypto enthusiasts by stating that any investment in the sector is still quite some time away.
“While we are certainly considering cryptocurrencies as a way to diversify our members’ retirement savings, we will not be investing in the immediate future. Any investment is more likely in the medium term.”
On the other side of the fence is Paul Schroder, CEO of AustralianSuper, Australia’s largest superannuation fund with $245 billion AUD under management — who quickly denounced cryptocurrency as an investment choice, owing to the fact that crypto assets do not generate any income or revenue.
“We don’t see cryptocurrency as investable for our members,” he said at a conference in Sydney on Monday.
A good deal of hype around institutional interest in crypto assets sprung up after Commonwealth Bank announced in November last year that it would also be offering crypto investment services to its clients. However, the decision seemed to be motivated less by an immediate investment strategy and more by FOMO with CBA CEO Matt Comyn telling Bloomberg:
“We see risks in participating, but we see bigger risks in not participating.”
Comyn continued, “we don’t have a view on the asset price itself, we see it as a very volatile and speculative asset, but we also don’t think that the sector and the technology is going away anytime soon.”
While the volatile domain of cryptocurrency doesn’t seem to be the most intuitive match up for a dependable fund that’s designed to help everyday Australians retire in safety — over two thirds of Aussie crypto investors have been calling on superannuation funds to gain more exposure to the crypto market, according to a July 2021 survey conducted by polling service YouGov and crypto exchange Swyftx.
As most blockchain enthusiasts are waiting for superannuation funds to catch up, other investors have been taking matters into their own hands, with more than two-in-five current crypto owners indicating that they already have some level of exposure to cryptocurrencies in their retirement savings, presumably via a self-managed super fund (SMSF).
Ultimately, the majority of superannuation funds are still a very long way from investing in any crypto or blockchain-related assets. In the meantime, ASIC (Australian Securities & Investment Commission) has provided a staunch warning to Aussie investors looking to use their retirement savings to invest in crypto assets.
“Be wary of services offering to establish an SMSF for you in order to gain exposure to cryptocurrencies. Not only does operating an SMSF involve significant time, skills and responsibility, you may also be putting your retirement savings at risk.”