Cryptocurrencies as Pension Fund Components: Smart Move or Drinking the Kool-Aid

Posted: 23 Apr 2021

See all articles by Marco Soland

Marco Soland

HWZ Hochschule für Wirtschaft Zürich

Patrick Schueffel

Haute école de gestion (HEG) de Fribourg

Date Written: February 4, 2021

Abstract

This study investigates whether cryptocurrencies can be considered a viable addition to pension funds. Using the regulatory setting of Switzerland, it is assessed whether crypto components added to a standard pension fund portfolio has positive effects on the fund’s risk and return figures. The empirical data supports the notion that cryptocurrency components may well increase the yield of a pension fund portfolio, yet this enhancement of yield comes at slightly higher risk levels. This increase in risk can be mitigated by adding an actively managed crypto component to the portfolio rather than a passive investment product. The article contributes to the ongoing debate in the area of financials innovations on the purpose and solidity of cryptocurrencies as an asset class.

Keywords: cryptocurrency, pension fund, portfolio management, financial regulation

JEL Classification: G11, G18, G23, H55, J33

Suggested Citation

Soland, Marco and Schueffel, Patrick, Cryptocurrencies as Pension Fund Components: Smart Move or Drinking the Kool-Aid (February 4, 2021). Available at SSRN: https://ssrn.com/abstract=3831956

Marco Soland

HWZ Hochschule für Wirtschaft Zürich ( email )

Lagerstrasse 5
Zurich, 8021
Switzerland

Patrick Schueffel (Contact Author)

Haute école de gestion (HEG) de Fribourg ( email )

Chemin du Musée 4
Fribourg, 1700
Switzerland

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