AMP’s Entry into Bitcoin Confirmed
December 12, 2024
AMP, a well-known financial company, has jumped into the world of bitcoin. This move was confirmed by Steve Flegg, a senior portfolio manager at AMP, who shared the news on LinkedIn. Flegg expressed that the growth and potential of cryptocurrency have become too significant to ignore, leading to AMP’s decision to invest a portion of its superannuation assets in bitcoin.
Stuart Eliot, the head of portfolio management at AMP, elaborated on the decision, stating that after careful consideration by the investment team and committee, AMP decided to include a “small and risk-controlled position” in digital assets within its Dynamic Asset Allocation program earlier this year. This exposure accounts for approximately 0.05% of AMP’s total superannuation assets under management and acknowledges the changes in the industry, such as the introduction of exchange-traded funds by major international investment managers.
On the other hand, Jonathan Armitage, the chief investment officer at CFS, cautioned against the inclusion of cryptocurrency in superannuation portfolios due to its volatile nature. Despite the interest shown by 15% of Australian investors and 30% of prospective investors in cryptocurrency, Armitage pointed out the speculative characteristics of digital assets compared to traditional asset classes like equities and bonds.
Similarly, Brian Parker, the chief economist of Australian Retirement Trust, expressed skepticism about investing member funds in cryptocurrencies like bitcoin. He highlighted the lack of interest payments, speculative nature, and uncertainty about its behavior over economic cycles as reasons for caution.
In conclusion, while some financial institutions like AMP are venturing into bitcoin, others like CFS and Australian Retirement Trust remain cautious. The decision to include cryptocurrency in a portfolio requires a deep understanding of its correlations with other assets and behavior across various market cycles. For now, traditional assets like shares, bonds, and property continue to be favored for their income and growth potential.