KiwiSaver is a voluntary saving scheme to help set you up for your retirement. It is centrally administered by the Inland Revenue.

The KiwiSaver Growth Fund, an investment fund geared to saving for retirement, has invested about 5% of its assets in bitcoin. This was revealed by James Grigor, Chief Investment Officer at NZ Funds while speaking to Stuff.

NZ Funds’ KiwiSaver Growth Strategy fund had investments amounting to about $350 million​ at the end of December.

NZ Funds invested the KiwiSaver its bitcoin allocation in a bitcoin fund from U.S. company Galaxy Digital.

Gold is the inspiration

The fund invested in bitcoin in October when it changed its offer documents to allow for investments in cryptocurrencies.

According to Grigor, bitcoin had many of the investible attributes of gold and had now become a commodity.

“If you are happy to invest in gold, you can’t really discount bitcoin,” he said.

[60:40] still king?

Grigor pointed out, however, that traditional assets such as stocks and bonds were still the majority holdings at his funds.

“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,” he said.

“But there’s going to be times when it’s not always going to be plain sailing. You may still have a positive view of those asset classes, but other opportunities present themselves,” he said.

“Opportunity” is right. KiwiSaver got into bitcoin in October when the price of the leading cryptocurrency was around $10,000. Prices have quintupled since then, and are quoting at $52,752 at the time of writing.

Bitcoin is up 690% over the past year, and over 82% in 2021 to date.

Bitcoin price volatility

But what about bitcoin’s legendary volatility?

“I think bitcoin within KiwiSaver is tantamount to gambling, not investing,” said Sam Stubbs, chief executive of the Simplicity KiwiSaver Scheme. “I’m surprised any KiwiSaver manager would consider it a legitimate asset class.”

Grigor is undeterred, with his bullish view undimmed.

“If we think the momentum has gone, we will move onto the next asset class”.

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