Why Gold?

Gold has long been regarded as a timeless store of value, but in recent years it has experienced renewed momentum as an alternative investment. Against a backdrop of global uncertainty, investors are increasingly turning to gold not only for its traditional role as a hedge against inflation, but also as a strategic asset that offers diversification and resilience.

Several factors have contributed to this surge in interest. Persistent inflationary pressures, rising interest rates, and currency volatility have eroded confidence in traditional asset classes, while geopolitical tensions and shifting global trade dynamics have further heightened the appeal of safe-haven assets. At the same time, the growing availability of gold-backed exchange-traded funds (ETFs) and other accessible investment vehicles has made gold easier than ever to incorporate into diversified portfolios.

The result has been a notable increase in gold allocations across both institutional and retail portfolios worldwide. More than just a defensive asset, gold is now being positioned as part of a broader investment strategy in times of economic transition. Understanding the reasons behind this trend provides valuable insights into how investors can navigate today’s uncertain markets while seeking both protection and long-term growth.

Portfolio Strategy

Quant driven investment selection has been used to identify the 7 holdings in the Gold Leaders portfolio strategy (4 US-listed, 2 AUS-listed, 1 HK-listed). The holdings have been further reviewed for liquidity and correlations to ensure sufficient diversification between holdings.

Data and Calculations

The securities pricing data was sourced from the respective exchanges via our data provider.

For Australian and Hong Kong securities, pricing data was converted to USD. Daily FX rates were sourced from the Reserve Bank of Australia.

For quarterly re-optimisations, we assumed a brokerage fee of US$3 for all buy/sell transactions. If you use a broker who has higher brokerage fees, the performance results would be different.

The Diversiview Optimiser has been used to calculate the Optimal Portfolio allocation on a quarterly basis, starting from 3/07/2023. Optimal Portfolio allocation is the one that aims to maximise the expected return of the portfolio and to minimise the total portfolio volatility.

Note: past performance does not guarantee the future performance of any of the holdings, nor the performance of the portfolio strategy overall.

Re-optimisation and Updates

Regular re-optimisation of the asset allocation is initiated every quarter and notifications of portfolio exposure changes are sent to the subscribers.

This is not a recommendation but a re-analysis of the portfolio strategy. Subscribers are at liberty to decide whether this strategy suits their risk appetite and whether they want to act or not on the changes in the portfolio asset allocation.

If they choose to action the changes in the strategy, subscribers need to execute the trades themselves through a broker of their choice.

Potential Risks

While global ETFs offer diversification and broader growth opportunities, they are not without risks. Investors should be aware of several factors that can influence performance and volatility.

Market volatility remains a fundamental risk: global ETFs can still fluctuate with overall market sentiment or sudden global events. Even well-diversified portfolios may experience temporary declines when multiple markets move together during periods of high uncertainty.

Currency risk is another important consideration. Returns on ETFs that hold assets in foreign currencies can be affected by exchange rate movements.

Country and geopolitical risks also play a role. Political instability, regulatory changes, or economic slowdowns in specific regions can impact ETFs focused on those markets. Emerging markets, while offering higher growth potential, often carry higher volatility and less transparency.

Tax notice

If you subscribe to the portfolio and buy the securities in this portfolio strategy, you may incur CGT at the time of the quarterly re-optimisation. The actual percentage will be dependent on the regulations and tax income bracket in your own country. In many countries the CGT rate is discounted by 50% if you hold the investments for at least 12 months.

Please consult your tax advisor for more information and professional advice.