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This week's highlights Equity markets moved lower last week with short funds BBUS, SNAS, BBOZ and BEAR topping the weekly performance table. Asian technology and technology-related funds ASIA and CNEW were amongst the few equity funds in the green. European focused funds ESTX, HEUR, IEU and VEQ were all amongst the week’s poorest performers as COVID lockdowns accelerated across the continent. The U.S. dollar strengthened on haven buying, with YANK, USD and ZUSD all amongst the top performers for the week. Gold remained steady, while other precious metals declined. Oil fund OOO ended the week down 10.3%. Total reported flows into domestically domiciled ETFs were $925m, while outflows totalled $83m. Domestic equity fund VAS saw the biggest inflows for the week followed by fixed income funds VBND and VAF. Domestic equity fund IOZ and bearish fund BBOZ saw the week’s largest outflows. BBOZ was the most traded fund for the week, followed by AAA. Global equity fund QUAL saw above average volumes. ...
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Gold can seem like a mysterious asset, but data suggests it has a clear value in a portfolio. Setting the price Gold prices are set by the London Bullion Market Association (LBMA) which also incorporates specific global standards for gold sales and receipt. According to the World Gold Council, there are four broad sets of drivers to indicate gold’s performance1 which vary in their influence at different points in time. Economic expansion: gold is used in jewellery, technology and long-term savings. These are areas that experience a boost in times of economic growth. These are also periods where inflation and interest rates may rise, and gold is traditionally viewed as a hedge against inflation. ...
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The value of gold is more than its spot price but also how it works in a portfolio. As an asset with multiple drivers determining its price, gold can seem mysterious, but the data suggests its role in client portfolios is clear. Gold’s investment value Gold can’t be valued using traditional metrics related to coupon or dividend value. While some institutions have created their own models, it can be more valuable to consider the interaction of gold with other assets in a portfolio. Gold is included in portfolios for a myriad of reasons – diversification, growth, as a hedge against inflation, and for a volatility safe-haven. These reasons are backed by the data. The below chart shows the correlation between gold and other asset classes which demonstrates why it is able to perform differently and even offer positive performance in volatile periods. ...