The small KiwiSaver provider Kōura is offering its members the chance to add cryptocurrencies to their portfolio mix, but warns it is not suitable for everyone.
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It was launching its new Carbon Neutral Crypto Currency Fund this morning, which it said was the first of its kind in New Zealand and is one of just two globally.
The fund would invest in Bitcoin, as well as its derivatives, and would offset the high carbon emissions associated with Bitcoin through the purchase of carbon offsets.
"Each and every year we will take a review, [to determine] our average holding for the year, and then we will go and purchase some carbon offsets to make sure that from our perspective it remains carbon neutral," Kōura managing director and founder Rupert Carlyon told RNZ.
Kōura has about 1000 members and $35 million in funds under management. It allows its members to use its digital advice tools to build personalised investment portfolios by offering them six different funds to invest in.
Carlyon said the crypto fund could only make up a maximum of 10 percent of an investor's portfolio.
"We don't think that 100 percent KiwiSaver allocation is appropriate. It is a very volatile asset with lots of swings, ups and downs, and it's also not an asset class that's proven."
He said crypto was not appropriate for everyone and Kōura wanted to make sure people were not putting their retirement savings at risk.
"So, this is a way that people can get a nice exposure to cryptocurrencies, it's easy to do, it's low cost and there's a carbon offset."
Canadian fund manager Fidelity would oversee the Bitcoin fund.
Annual fees on the crypto fund would be 1.1 percent, which is close to double the flat fee of 0.63 percent Kōura charges across its other funds.
Carlyon said a "smallish" part of the fee would help fund the carbon offsets, while the higher relative margin was because the "infrastructure required to invest in cryptocurrencies was significantly more expensive than the infrastructure required for a typical equities or fixed income portfolio".
He said "it was pretty good value" because similar funds in the US charged anywhere between 0.95 percent and 2.5 percent.
Another KiwiSaver provider, NZ Funds, also invests in cryptocurrencies, and has said previously that the approach had seen it achieve strong returns in the 2021 financial year.
Carlyon said he thought other KiwiSaver providers should be looking at providing customers with a chance to get exposure to cryptocurrencies in their portfolios.
Kōura has also launched new clean energy and domestic property funds.
