The CIO of UniSuper, John Pearce, described the recent rally in cryptocurrencies as a “sign of irrational exuberance” and firmly stated that the savings of UniSuper’s 647,000 members will “not be going anywhere near” such investments.
This comes as Pearce, in the fund’s latest investment update, noted that while the S&P 500 has posted strong performance in 2023 and 2024, history shows it’s rare to see three consecutive years of returns exceeding 20 per cent.
Expounding on this, he said that both the US and Aussie markets are both on the “expensive side” but not in “bubble territory”, but acknowledged that signs of bubbles do exist, particularly in the cryptocurrency market.
Doubling down on his dislike of cryptocurrency, Pearce pointed out that Dogecoin’s founders admitted it was created as a joke and highlighted the growing trend of meme coins, including those endorsed by public figures like Donald Trump and Melania.
“Trump and Melania [are] getting in on the act and cashing in on their fame with some very expensive meme coins there,” he said. “To me, this is clearly a sign of irrational exuberance.
“I am occasionally told that crypto is here to stay, it’s the way of the future, don’t be a dinosaur, get with the program. Frankly, if you look at that, I think it’s more of a joke that’s just gone too far, and our members’ life savings will not be going anywhere near cryptocurrency investments.”
This is not the first time the $139 billion fund has expressed its dislike for cryptocurrency, namely, a spokesperson for the fund told InvestorDaily in December: “Cryptocurrency does not form part of our investment universe, we don’t believe it is an appropriate asset to allocate our members’ life savings to.”
The comment came after it was revealed that AMP had become Australia’s first super fund to make an allocation to bitcoin, having acknowledged that the digital currency was becoming “too big to ignore”.
UniSuper has been fielding questions regarding its stance on cryptocurrency, with some members asking the fund at a meeting in December about the possibility of voluntary exposure to bitcoin, as offered by other international super funds.
Namely, the minutes of its 2024 annual members meeting revealed that when questioned to this effect, Pearce confirmed the fund is not looking to set up an option for members to voluntarily invest in, nor does it plan to include cryptocurrency in any of its investment options.
“In fact, we are not seeing much evidence of pension funds around the world, including bitcoin in their products. What members may be seeing is retail platforms offering bitcoin as a trade and potentially endowment funds using it,” Pearce said.
“Pension or superannuation funds are generally not investing in bitcoin, or any other cryptocurrency, given the responsibility of investing individuals’ life savings.”
While UniSuper remains firm in its exclusionary stance on cryptocurrencies, peers like AustralianSuper, the largest fund by assets, have adopted a more measured approach, exploring blockchain technology for potential growth despite not planning direct cryptocurrency investments.
“AustralianSuper does not have any current plans to invest directly in cryptocurrencies,” the fund’s spokesperson told InvestorDaily last year.
“The fund is looking at blockchain technology as a potential investment opportunity and has made some small investments in companies that use the underlying technology in other ways.”
HESTA, on the other hand, told InvestorDaily in December that while the fund does not currently invest in cryptocurrency, it is actively monitoring the space.
“At this time, HESTA does not invest in crypto assets. However, we are actively monitoring the institutionalisation of digital assets with our investment management partners,” the fund’s spokesperson said.
Pension funds around the globe are exploring the merits of cryptocurrency, with UK pension fund Cartwright becoming the first in the country to invest in bitcoin last month. Meanwhile, in the US, Michigan’s state pension fund recently became the first to invest in Ethereum exchange-traded funds (ETFs), allocating a total of US$11 million to Grayscale’s Ethereum Trust and Ethereum Mini Trust ETFs.
