Swiss pension funds face ongoing economic challenges, with rising inflation and geopolitical risks affecting asset values. While there has been some recovery since 2022, the positive correlation between bonds and equities has weakened bonds' role as diversifiers.
Key Points:
Gold's Value: Gold has consistently provided positive returns during market downturns, outperforming in eight of the ten worst years for Swiss equities.
Portfolio Benefits: A 5% allocation to gold can reduce reserve requirements and improve portfolio stability, enhancing risk-adjusted returns.
Effective Diversification: Gold’s negative correlation with other assets during market selloffs makes it a valuable tool for reducing overall portfolio risk.
For Swiss pension funds, gold offers a strategic advantage in managing economic uncertainty and protecting portfolio value.
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