Investors should take a closer look at including gold in their portfolios at times of growing uncertainty in 2019, ETF Securities has said.
According to the firm, investors could benefit from gold’s ability to appreciate in a bear market due to its low or negative correlation with stocks and bonds.
This could be of particular importance given broader geopolitical risks, fuelled by growing US-China tensions and Brexit, ETF Securities’ chief executive, Kris Walesby, said.
“It’s also far from clear how aggressive the US Fed might be as it continues to raise interest rates. And at home we have a housing market downturn and a looming election throwing up headwinds,” he noted.
The firm’s GOLD ETF, which offered investors exposure to movements in gold prices in Australian dollars, jumped in December by 9.15 per cent, compared to a 0.37 per cent decline in the ASX 200.
According to Walesby, the fund’s performance was driven by the vital role that gold played in a “sensibly diversified portfolio”.
“Through our GOLD ETF, investors can have that diversification without any related transport, storage or insurance costs.”