The Diversity of Real Assets
A wide diversity in macroeconomic and market sensitivities across real asset classes and subsectors implies choice of assets differs with investment objectives.
In the current low interest rate environment, institutional investors have specifically inquired about investing in gold and the potential hedging benefits against inflation or an economic slowdown. Existing investment research on gold-related assets has produced conflicting results about the role of gold in institutional portfolios, partly the result of different time periods being examined. We find that gold has not performed particularly well long-term compared to other assets. However, there is a place for gold-related assets separate from commodities and energy equities.