Gold is a highly liquid yet scarce asset, and it is no one's liability. It is bought as a luxury good as much as an investment. As such, gold can play four fundamental roles in a portfolio:
• a source of long-term returns
• a diversifier that can mitigate losses in times of market stress
• a liquid asset with no credit risk that has outperformed fiat currencies
• a means to enhance overall portfolio performance.
Our analysis shows that adding 2%, 5% or 10% in gold over the past decade to the average pension fund portfolio would have both increased returns and reduced volatility, resulting in higher risk-adjusted returns.
This white paper benchmarks gold relative to other asset classes and demonstrates how gold can potentially improve your portfolio.
Juan Carlos Artigas, Director, Investment Research; Alistair Hewitt, Director, Market Intelligence; Adam Perlaky, Manager, Investment Research; John Reade, Chief Market Strategist
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All white papers posted were created by the listed authors who are solely responsible for the research, finding and all materials contained therein. Pensions & Investments has not verified or edited the materials (other than for length and style) and does not necessarily agree or disagree with the analysis and positions expressed by the authors. Reference to any company, product or service does not imply recommendation or sponsorship by Pensions & Investments.
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