The World Gold Council says adding 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
Gold is becoming more mainstream.
Since 2001, investment demand for gold worldwide has grown 18% per year, on average. This has been driven in part by the advent of new ways to access the market, such as physical gold-backed exchange-traded funds (ETFs), but also by the expansion of the middle class in Asia, and a renewed focus on effective risk management following the 2008–2009 financial crisis in the US and Europe.
Today, gold is more relevant than ever for institutional investors. While central banks in developed markets are starting to normalise monetary policies – leading to higher interest rates – we believe the effect of quantitative easing and the prolonged period of low interest rates can have a long-term effect.
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