Amid Economic, Geopolitical Uncertainties, Majority of Financial Advisors Expect To Increase or Maintain Allocations To Gold
- Vast Majority of Advisors (87%) Currently Allocate Assets to Gold
- Role as a Portfolio Diversifier is Top Reason Cited For An Allocation to Gold
- Physically Backed Gold ETFs Attract Most Assets
“While interest rates are widely expected to be cut during the next 12 months, advisors’ allocations to gold have remained fairly consistent,” said
Across all North American financial advisors, nearly 9 in 10 (87%) advisors currently allocate assets to gold. Among those with gold exposure in client accounts:
- 32% have less than 1% of total client assets under management allocated to gold;
- 56% have between 1% and 4.9% of assets allocated to gold; and
- 13% have 5% or more of assets allocated to gold.
The vehicle of choice for allocating assets to gold is physically backed gold ETFs, which on average account for 40% of advisors current investments in gold, followed by gold mining ETFs (16%), gold mutual funds (16%), and index or multi-asset funds that include gold or gold-mining stocks (16%).
"The recent gold price rallies have piqued investor interest, and with good reason amidst today's economic and geopolitical uncertainty," said
The top three reasons cited by financial advisors for investing in gold or increasing exposure to the precious metal include:
- Gold is a proven diversifier, especially in periods of financial turmoil and economic uncertainty (48%)
- Gold has stood the test of time as a safe and proven store of value (36%)
- Our clients express a desire to invest in gold (35%)
Conversely, the most frequently cited barriers that hinder investment into gold include:
- Gold does not pay coupons or dividends (54%)
- Gold's intrinsic value is difficult to calculate due to a lack of an established model (28%)
- Gold is viewed as a speculative investment (26%)
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