Jupiter Asset Management’s Decision Regarding Crypto Exposure
Jupiter Asset Management’s compliance team made a strategic move by prohibiting its investors from gaining exposure to a cryptocurrency exchange-traded product (ETP) within one of its Irish UCITs funds. This decision, as revealed in a report by the Financial Times, was influenced by the “divergent regulatory approaches in the EU.”
UCITS, known as open-ended investment funds, are a favored investment vehicle in Europe, particularly among retail investors. Ireland’s current regulatory framework does not permit crypto investments in UCITS funds, leading to the restriction imposed by Jupiter Asset Management.
“The Commissioner in Ireland has been very clear about crypto investment vehicles such as ETFs and ETPs, they do not recognize Bitcoin or crypto as qualified [asset class], hence why today this still stands,” stated Laurent Kssis, a respected crypto expert on trading and ETFs at CEC Capital.
Jupiter, a prominent UK-based fund management group managing equity and bond investments, oversees assets worth $66.5 billion. Despite media reachout, a spokesperson for Jupiter Asset Management remained unavailable for further comments on the report by the Financial Times. The spokesperson clarified that there was no regulatory interference or impact on the fund as the trade, once identified, was promptly retracted.
The Influence of Diverging Regulations on Investment Decisions
In the crypto investment landscape, regulatory disparities across European countries have hindered fund managers from including crypto assets in their portfolios. Acknowledging the challenges, European fund managers have encountered obstacles in incorporating crypto assets due to conflicting regulations.
In a noteworthy case, the UK-based Ruffer Investment Management reported a substantial $1.1 billion profit within five months through bitcoin investments. With exposure to bitcoin in 2020, the Guernsey-based Ruffer Investment Company witnessed significant gains. Addressing the decision to sell bitcoin, a Ruffer investment director mentioned a shift in trading behaviors, anticipating reduced interest from younger demographics post-pandemic lockdowns.
Noteworthy European crypto ETP providers include 21Shares, CoinShares, WisdomTree, and other recognized names in the industry. However, regulatory bodies like the FCA in the UK have imposed restrictions on certain crypto products, citing concerns about potential risks to retail consumers. Nonetheless, institutional investors can still access crypto offerings through established entities such as Goldman Sachs, ICAP, JPMorgan, and UBS.
