Ireland does not allow crypto investments in Ucits funds but Germany’s regulator takes a different stance © REUTERS

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Jupiter’s compliance department blocked its investment team from holding a cryptocurrency exchange traded product in one of its Irish Ucits funds, highlighting divergent regulatory approaches in the EU.

The disclosure of the incident comes as fund managers increasingly look to hold crypto assets in funds, but are unable to do so uniformly across the EU.

Ireland does not allow crypto investments in Ucits funds but Germany’s regulator takes a different stance, reflected in DWS’s Fintech fund maintaining a holding in an ethereum exchange traded note.

The investment team of Jupiter’s Ireland-domiciled €565mn Gold & Silver fund bought into 21Shares’ Ripple XRP ETP at a cost of $2,571,504 during the first half of 2023.

This article was previously published by Ignites Europe, a title owned by the FT Group.

The trade was picked up by Jupiter’s “regular oversight process”, which required the holding to be cancelled.

Jupiter sold the cryptocurrency ETP holding for $2,570,670, at a loss of $834, according to a financial statement. The firm has made up the difference, according to a spokesperson.

Jupiter said the fund was stopped from holding the investment as Ireland’s regulator prohibits exposure to crypto in Ucits funds.

There was no regulatory intervention or impact on the fund, Jupiter said.

“The trade was made, picked up by our regular oversight process and then cancelled,” the spokesperson added.

Jupiter’s Gold & Silver fund, which is managed by Ned Naylor-Leyland, Chris Mahoney and Joe Lunn, previously made a cryptocurrency investment in 2017, which took place before the Irish financial regulator clarified its position on such holdings.

Ucits funds are allowed to invest up to 10 per cent of their portfolio in illiquid assets, the so-called trash ratio, but European regulators differ on whether this can include ETPs that hold cryptocurrencies.

Regulators from Ireland and France have recently indicated that they do not envisage Ucits funds being allowed to invest in crypto assets.

During a discussion at the Future of Asset Management conference in November, Cian Murphy, head of the international finance division at the Central Bank of Ireland, said that “it’s difficult to make the case” for introducing crypto assets into a Ucits fund.

Jessica Reyes, head of the asset management policy division at the Autorité des Marchés Financiers, added that securities regulators generally are “not comfortable” with Ucits funds gaining crypto exposure.

Both regulators noted that retail investors can gain crypto exposure through alternative investment funds.

UK Ucits funds are also not permitted to invest in crypto assets.

The German financial regulator does not allow Ucits funds to invest directly in crypto assets, but does allow crypto ETP exposure, as long as this reflects the underlying asset on a one-to-one basis.

The €24mn DWS Fintech fund has had a holding in the VanEck Ethereum ETN since late 2022, Ignites Europe has found.

The €84,400 holding accounted for 0.35 per cent of the Ucits fund’s portfolio at the end of 2023, according to Morningstar data.

Daniela Gombert, manager of the Germany-domiciled Fintech fund, also manages DWS’s €1.9bn ESG Top Asien and €6mn Together for Tomorrow funds.

A spokesperson for DWS said the manager had “a selected number” of multi-asset, equity and fixed income funds that can invest into cryptocurrencies.

None of DWS’s institutional mandates or multi-asset funds currently invest in cryptocurrencies, however.

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Thomas Schuessler, global co-head of equities at DWS, recently wrote that crypto is “like risk-on gold” and has “a low correlation to other assets”.

Schuessler added that while crypto “can make a significant difference to [fund] performance because the upside is substantial”, it should only be bought “in certain circumstances”.

UK asset manager Ruffer caused surprise when it used its Guernsey-based closed-ended fund, Ruffer Investment Company, to gain exposure to bitcoin in 2020.

Ruffer said at the time that it viewed bitcoin as “a small but potent insurance policy” and its exposure was “primarily a defensive move”.

Last year the European Commission instructed Europe’s markets watchdog to review the Ucits eligible assets directive to assess possible changes to the asset classes to which funds are allowed to gain direct and indirect exposure, including crypto assets.

Additional reporting by Robert Van Egghen.

*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at

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