Executive Summary
Rising expectations of a rate cut in September supported global equity markets in August, with the MSCI World Index clocking a monthly return of 2.5%. Emerging markets were boosted by a rally in Chinese equities after the extension of China’s tariff truce with the United States. Gold’s performance over the course of the year has been stellar, outpacing every other asset class including Bitcoin. The perception of gold as an inflation shield is a case of half-truths becoming conventional wisdom. At best, it is a partial hedge, one that works in some environments but fails in others. Gold has often found itself having a modest allocation in portfolios due to its nature of producing no income. However, its performance in both long and medium term in addition to its low correlation with other asset classes makes a compelling case for Gold to be a portfolio diversifier. Bitcoin, which is considered to be a digital equivalent of gold by a few, has struggled to establish itself as a serious portfolio component. Gold’s long history, utility and low volatility continues to command respect from regulators and the market.
