Increased appetite for gold among investors: BetaShares
Gold is re-emerging as an attractive commodity for investors looking to diversify their portfolio, according to BetaShares.
BetaShares managing director, Alex Vynokur, said that despite global share market volatility and uncertainty, gold has significantly increased in value over the last few months and this growth trajectory may continue to rise throughout 2016.
"Widening credit spreads across a broad range of sectors, including US oil and gas, are pushing investors to seek alternative asset classes like gold," Vynokur said.
"In addition, central banks behind traditionally ‘safe haven' sovereign issuers such as Bank of Japan, Swiss National Bank and European Central Bank have moved to negative interest rates."
According to BetaShares, investor appetite for gold has driven increased inflows to the BetaShares Gold Bullion ETF — Currency Hedged (ASX: QAU).
QAU is currency hedged to help protect investors from currency risk, providing more pure exposure to the price of gold.
The company confirmed that since the beginning of 2016, QAU has almost doubled in size while gaining approximately 14 per cent, "significantly outperforming" the S&P/ASX 200 which is down by over 6 per cent.
Vynokur said that gold represented a ‘safe haven' asset for investors in the current economic climate as it does not have a negative real return.
"Gold is widely regarded as a reliable store of value and has been for centuries," he said.
"In uncertain markets like today's, investors are once again turning to a traditional refuge, and gold has become an in-demand investment."
Recommended for you
Research house Genium Investment Partners has appointed a head of investment solutions from Mason Stevens.
ASIC has made two appointments to its senior executive leadership team covering regulation and enforcement following an international search.
Perpetual has reported positive quarterly net inflows for the first time in 12 months, the first under the remit of new chief executive Bernard Reilly.
The global financial services firm has taken on a second AFSL as it looks to capitalise on the high-net-worth market in Australia.
