Gold's Enduring Role In Strengthening Portfolio Resilience
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WisdomTree5.78K FollowersFollow5ShareSavePlay(16min)CommentsSummaryDuring the 20 worst quarters for the S&P 500 since 1967, gold delivered positive returns in 15, highlighting its consistent performance as a defensive asset during equity downturns.The WisdomTree Efficient Gold Plus Equity Strategy Fund (GDE) offers a capital-efficient way to gain simultaneous exposure to equities and gold, using a 1.8x leveraged structure that enhances diversification without diluting growth potential.Replacing 10% of a traditional 60/40 portfolio with GDE created a 50/40/10 allocation that increased notional gold exposure while preserving nearly all equity exposure, improving resilience to both stock and bond market stress. joebelanger/iStock via Getty Images By Christopher Gannatti, CFA Throughout history, gold has shown a consistent ability to preserve value when traditional risk assets face pressure. Its performance during equity market downturns and economic slowdowns underscores its function as a stabilizer withinThis article was written byWisdomTree5.78K FollowersFollowIn 2006, WisdomTree launched with a big idea and an impressive mission — to create a better way to invest. We believed investors shouldn’t have to choose between cost efficiency and performance potential, so we developed the first family of ETFs designed to deliver both. Today, WisdomTree offers a leading product range that offers access to an unparalleled selection of unique and smart exposures.Quick InsightsHow does GDE enhance diversification compared to a traditional 60/40 portfolio?Allocating 10% to GDE introduces roughly 9% gold futures and 9% equity exposure, maintaining growth while adding a historically uncorrelated asset to the portfolio.What is the risk implication of GDE’s 1.8x notional leverage structure?GDE’s leverage magnifies both gains and losses, making it more volatile than unleveraged alternatives and heightening the risk of principal loss during adverse market moves.How has gold performed during historical equity market downturns?Gold delivered positive returns in 15 out of the 20 worst S&P 500 quarters since 1967, highlighting its role as a defensive asset during equity stress.Recommended For You