Tim Wilson has sold out of his “terrible” bet against the Australian share market, and claimed to have made a profit from the investment which the shadow treasurer said he would donated to an advocacy group for LGBT rights in Iran.

Guardian Australia first reported on the investment, a leveraged product that profits when the benchmark ASX 200 falls, last year. It was viewed as an unusual investment for a politician given the product profits from market slumps, which is linked to the performance of the economy.

A Sydney-based financial adviser previously told Guardian Australia that the product was “not common nor widely held” and had proven to be a “terrible” investment for the Liberal MP.

The Liberal MP still had the investment even after his recent appointment as shadow treasurer, according to his updated register of interests.

Wilson told parliament on Wednesday that he had sold the investment, called the Betashares Australian Equities Strong Bear Complex, and had submitted a statement of declaration that was yet to be published.

“While I did make a modest profit at sale, it has mostly been outstripped by the treasurer’s active inflation agenda,” Wilson said.

“I have donated it to the International Railroad for Queer Refugees, which assists people who need to flee their country from regimes like the Islamic regime in Iran.”

It is not immediately clear how Wilson profited from the investment given it had lost about 75% of its value between the time he bought it in early 2020, and his most recent register disclosures, made in February.

Wilson’s office was contacted for comment.

Recently, the Labor government had criticised Wilson over his investments.

The Liberal MP’s office has previously declined to disclose the size of the investment, which is typically used as a short-term hedge against market falls.

Wilson told parliament he had initially purchased the shares to protect against a “black swan” event linked to the Covid pandemic.

In market terms, a “black swan” event refers to an unpredictable, rare occurrence that has a catastrophic impact.

While the market did sell off shortly after Wilson took out the investment in early 2020, subsequent disclosures show that he held on to it during the market recovery.

The product takes a “short” position that profits when the market falls, and uses gearing to magnify gains, and losses.