UK – Managers of pension funds and other institutional funds in the UK should not ignore gold when looking at alternative asset classes, according to Dr Robert Weinberg, head of institutional investment at the World Gold Council.
Speaking at a London conference, Weinberg claimed that gold was an asset “in a class of its own” because of particular attributes not found in other investment classes and that it was a particularly effective tool in portfolio risk management.
Noting that the investment environment was highly dynamic and could become volatile without warning, he said investors had become increasingly concerned with the uncertain outlook for the different mainstream asset classes and were looking to alternatives.
“Gold is not an apocalyptic metal. It is an investment for all seasons,” Weinberg added. He said that one of gold’s main investment attributes was its liquidity, alongside its low or negative correlation with other commonly held asset classes.
Weinberg suggested that the majority of the investment management community was unaware of the role gold could play as a portfolio diversifier, mainly as a result of the fall in the price of US gold and the high levels achieved recently by equities.
But he warned that it may be time to look elsewhere. “It does seem that current market uncertainties, investment risks, are perhaps greater than most of us have ever experienced. A portfolio without gold is a luxury you can no longer afford.”