Amid Economic, Geopolitical Uncertainties, Majority of Financial Advisors Expect To Increase or Maintain Allocations To Gold

By: State Street Corporation via Business Wire

June 25, 2024 at 08:30 AM EDT

Vast Majority of Advisors (87%) Currently Allocate Assets to Gold

Role as a Portfolio Diversifier is Top Reason Cited For An Allocation to Gold

Physically Backed Gold ETFs Attract Most Assets

State Street Global Advisors, the asset management business of State Street Corporation (NYSE: STT) and the World Gold Council, today released the results of its Gold Perceptions Survey, which is designed to better understand how current market conditions are impacting perceptions of gold across investor cohorts. According to the research, 29% of financial advisors in North America plan to increase allocations to gold over the next 12 to 18 months, 62% report their allocations to gold are expected to remain the same and 9% believe they will decrease the percentage of client assets invested in gold.

“While interest rates are widely expected to be cut during the next 12 months, advisors’ allocations to gold have remained fairly consistent,” said George Milling-Stanley, Chief Gold Strategist at State Street Global Advisors. “This suggests that a growing majority of advisors are using gold as a core asset for long-term investment horizons, which is where it shines in the context of a well-balanced, diversified portfolio.”

Across all North American financial advisors, nearly 9 in 10 (87%) advisors currently allocate assets to gold. Among those with gold exposure in client accounts:

32% have less than 1% of total client assets under management allocated to gold;
56% have between 1% and 4.9% of assets allocated to gold; and
13% have 5% or more of assets allocated to gold.

The vehicle of choice for allocating assets to gold is physically backed gold ETFs, which on average account for 40% of advisors current investments in gold, followed by gold mining ETFs (16%), gold mutual funds (16%), and index or multi-asset funds that include gold or gold-mining stocks (16%).

"The recent gold price rallies have piqued investor interest, and with good reason amidst today's economic and geopolitical uncertainty," said Joseph Cavatoni, senior market strategist at the World Gold Council. "Many investors and advisors alike used to look at specific factors, like interest rates and the dollar, in isolation when considering an allocation to gold. But as a global asset with a multitude of both strategic and tactical drivers that are supporting demand, a strong case can be made for gold in the year ahead.”

The top three reasons cited by financial advisors for investing in gold or increasing exposure to the precious metal include:

Gold is a proven diversifier, especially in periods of financial turmoil and economic uncertainty (48%)
Gold has stood the test of time as a safe and proven store of value (36%)
Our clients express a desire to invest in gold (35%)

Conversely, the most frequently cited barriers that hinder investment into gold include:

Gold does not pay coupons or dividends (54%)
Gold's intrinsic value is difficult to calculate due to a lack of an established model (28%)
Gold is viewed as a speculative investment (26%)

About the Gold Perceptions Survey

State Street Global Advisors and the World Gold Council conducted a survey of 400 financial advisors in North America with $100 million or more in total assets during the Fourth Quarter of 2023. Respondents were evenly split between wirehouses, Independent Broker-Dealers, and Registered Investment Advisors.

About World Gold Council

We are a membership organisation that champions the role gold plays as a strategic asset, shaping the future of a responsible and accessible gold supply chain. Our team of experts builds understanding of the use case and possibilities of gold through trusted research, analysis, commentary, and insights. We drive industry progress, shaping policy and setting the standards for a perpetual and sustainable gold market.

You can follow the World Gold Council on X (Twitter) at @goldcouncil and LinkedIn.

About State Street Global Advisors

For four decades, State Street Global Advisors has served the world’s governments, institutions and financial advisors. With a rigorous, risk-aware approach built on research, analysis and market-tested experience, we build from a breadth of index and active strategies to create cost-effective solutions. As pioneers in index and ETF investing, we are always inventing new ways to invest. As a result, we have become the world’s fourth-largest asset manager* with US $4.34 trillion† under our care.

*Pensions & Investments Research Center, as of 12/31/22.

†This figure is presented as of March 31, 2024 and includes ETF AUM of US $1,360.89 billion USD of which approximately US $65.87 billion USD is in gold assets with respect to SPDR products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated. Please note all AUM is unaudited.

Important Risk Disclosures

Investing involves risk, including the risk of loss of principal.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.

All information is from SSGA unless otherwise noted and has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF's net asset value. Brokerage commissions and ETF expenses will reduce returns.

Commodities and commodity-index linked securities may be affected by changes in overall market movements, changes in interest rates, and other factors such as weather, disease, embargoes, or political and regulatory developments, as well as trading activity of speculators and arbitrageurs in the underlying commodities.

Intellectual Property Information: The S&P 500^®Index is a product of S&P Dow Jones Indices LLC or its affiliates (“S&P DJI”) and have been licensed for use by State Street Global Advisors. S&P^®, SPDR^®, S&P 500^®, US 500 and the 500 are trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and has been licensed for use by S&P Dow Jones Indices; and these trademarks have been licensed for use by S&P DJI and sublicensed for certain purposes by State Street Global Advisors. The fund is not sponsored, endorsed, sold or promoted by S&P DJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of these indices.

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6498379.1.1.AM.RTL Exp. Date: 06/30/2025

View source version on businesswire.com: https://www.businesswire.com/news/home/20240610774929/en/

Contacts

Deborah Heindel

617-662-9927

dheindel@statestreet.com

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