GLOBAL - A report by New Frontiers Advisors and the World Gold Council has concluded exposure to gold should be similar to that of an emerging market or small cap allocation in an efficient portfolio.
The report suggested Gold stabilized risky portfolios during periods of declining financial markets and poor economic climates.
The study also concluded that gold added diversifying power across much of a long-term portfolio’s risk spectrum. Gold’s diversification properties stem from its negative to low correlation with other major asset classes, including other commodities.
James Burton, chief executive of the World Gold Council said: “It is a widely held axiom among institutional investors, that long-term risk policy is the most crucial element of portfolio management. The research we have conducted, using the most advanced statistical techniques and portfolio optimisation technologies, demonstrates that gold can be a highly effective component of managing portfolio risk.”
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