SEATTLE (Scrap Monster): The most recent report published by the World Gold Council suggests that gold allocations are on the rise among institutional investors. It cites the research survey carried out by Coalition Greenwich among nearly 500 institutional investors across the globe. The survey had sought their opinion about their current portfolios as well as allocations on gold and other individual asset classes.
According to the study, about one out of five institutions have specific allocations to gold in their portfolios. Also, institutions in EMEA region were found keener on gold allocations. The average gold allocation by investors in their total policy portfolio stood at 4%. The survey also found that nearly 40% of the current gold investors expect to further increase their exposure in the next three years. Also, 40% of institutional investors who currently do not have exposure, plan to make investment during this time frame.
The key role played by gold in portfolio diversification was named by institutional investors as the key driver behind their plans for gold allocation. The gold’s role as a hedge against inflation coupled with hopes of enhanced risk-adjusted return too was identified as the other key drivers.
The institutional investors are likely to face an entirely new set of challenges as they position their portfolios during the post-Covid-19 period. The primary concern would be to protect their portfolios from rising inflationary risks.
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