Investors Seek Solace in Gold A Trusted Commodity and Investment Preference
Gold historically has been a preferred investment choice, especially among investors interested in commodities. Why? As part of our Gold ETF Impact Study 2023, we uncovered the reasons behind its popularity and what investors are saying about it.
Gold Ranks as a Popular Choice for Those Interested in Commodities
One-in-five survey participants currently have gold in their investment portfolios — on par with retail investors’ crypto currency ownership (21%).
The survey results suggest that those who hold gold and/or gold ETFs are more likely than other investors to invest in other commodities, particularly silver and crypto currency.
In this study, we discovered that more than half of surveyed investors (57%) do not currently have any of these commodities in their portfolios, including gold — which means there’s a large opportunity to review with investors the many ways to invest in commodities — from physical ownership to alternative investments to gold ETFs.
Gold ETFs Rank as One of the Top Ways to Invest in Gold
Among investors who currently have gold in their portfolios, allocations to physical gold are the leading investment choices — with a nearly even breakdown among physical gold ETFs (47%) and physical gold bullion (49%).
We found that surveyed investors who owned gold ETFs held other types of gold investments in their portfolios as well. Gold bullion topped the list, followed by gold mining stocks.
Are Gold Investors Increasing Their Gold Allocations?
Among survey participants who invest in gold and/or hold gold ETFs, gold makes up 14% of their portfolios, on average.
More than half of survey participants who invest in gold indicated that they are likely to increase their investment in gold over the next 6-12 months (53%); 57% of surveyed investors who invest in gold ETFs indicated the same plan.
Figure 6: How Gold Investors Plan to Allocate in the Next 6-12 Months
Investors Who Hold Gold ETFs
Investors Who Own Gold
Source: State Street Global Advisors, as of April 19, 2023. The above targets are estimates based on certain assumptions and analysis made by State Street Global Advisors. There is no guarantee that the estimates will be achieved.
Notably, few survey participants plan to decrease their investment in gold over the next 6-12 months, suggesting gold’s perceived role in investors’ portfolios.
Surveyed Investors Believe Gold May Be a Safe Haven During Times of Market Volatility
In our study, all surveyed investors were asked a series of questions pertaining to gold. Interestingly, 65% of surveyed investors said they believe gold may be seen as a safe haven* during times of market volatility. Other results were as follows:
Figure 7: Investors’ Viewpoints on Gold Allocations
Surveying All Investors Who Participated in This Study
*Assets may be considered "safe havens" based on investor perception that an asset's value will hold steady or climb even as the value of other investments drops during times of economic stress. Perceived safe-haven assets are not guaranteed to maintain value at any time.
Plus, a majority of survey participants agreed that the volatility in the stock market and inflation will continue for at least the next 12 months. And so, it may be a good time to introduce gold as a potential safe-haven* asset to clients worried about ongoing market uncertainty.
Gold ETFs Improved Overall Portfolio Performance, Participating ETF Owners Said
Nearly three quarters of surveyed investors who currently have gold ETFs in their portfolios said that the asset class has improved the overall performance of their portfolios.
Knowing that gold investors think highly of this investment, the question becomes: What benefits and purchasing considerations rank highest among gold investors?
More Key Findings from This Study
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When we launched SPDR® Gold Shares (GLD®) in 2004, it was the first US gold-backed ETF. GLD’s arrival made it convenient and cost effective for investors to have gold exposure in their portfolios. Since then, we’ve launched the low-cost SPDR Gold MiniShares® (GLDM®) and built a dedicated gold strategy team to help investors understand how gold can help their portfolio.
About the Study
State Street Global Advisors, in partnership with Prodege and A2Bplanning, conducted an online study surveying a random sample of approximately 1,000 individual investors in the US. Read more about the details.