Why we think gold is for life (not just for crises)

Many investors seem to have a throwaway attitude to gold. We think the precious metal can be a useful long-term allocation in a diversified portfolio.

22 Jul 2020

8 minutes

Many investors seem to have a throwaway attitude to gold. We think the precious metal can be a useful long-term allocation in a diversified portfolio.
Investors often have a throwaway attitude to their gold allocations. But we think gold’s a keeper. We explore why gold, and especially gold equities, can be useful long-term holdings. We also discuss why we believe a gold allocation can bring useful qualities to a diversified portfolio.

The fast view

  • Gold and gold equities can be useful buy-and-hold investments
  • A long-term gold allocation may add diversification, inflation protection, cyclical resilience and liquidity to a portfolio
  • Increasingly, gold equities offer a useful source of income

Download the paper

Specific risks

Commodity-related investment: Commodity prices can be extremely volatile and significant losses may be made.

Currency exchange: Changes in the relative values of different currencies may adversely affect the value of investments and any related income.

Derivatives: The use of derivatives is not intended to increase the overall level of risk. However, the use of derivatives may still lead to large changes in value and includes the potential for large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss.

Equity investment: The value of equities (e.g. shares) and equity-related investments may vary according to company profits and future prospects as well as more general market factors. In the event of a company default (e.g. insolvency), the owners of their equity rank last in terms of any financial payment from that company.

Geographic / Sector: Investments may be primarily concentrated in specific countries, geographical regions and/or industry sectors. This may mean that the resulting value may decrease whilst portfolios more broadly invested might grow.

General risks:

All investments carry the risk of capital loss. The value of investments, and any income generated from them, can fall as well as rise and will be affected by changes in interest rates, currency fluctuations, general market conditions and other political, social and economic developments, as well as by specific matters relating to the assets in which the investment strategy invests. If any currency differs from the investor’s home currency, returns may increase or decrease as a result of currency fluctuations. Past performance is not a reliable indicator of future results.

Authored by

George Cheveley

Portfolio Manager, Ninety One Global Gold

Important Information

This communication is provided for general information only should not be construed as advice.

All the information in is believed to be reliable but may be inaccurate or incomplete. The views are those of the contributor at the time of publication and do not necessary reflect those of Ninety One.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon.

All rights reserved. Issued by Ninety One.