Wealthy investors tend to park only about 10% of their portfolio in gold to act as a hedge: Report

360 One

Wealthy investors tend to park only about 10 percent of their portfolio in gold to act as a hedge, 360 One Wealth Index report stated on November 12.

This is because the respondents in the survey conducted by 360 One Wealth view gold as an excellent way to diversify their portfolio as the yellow metal reacts differently to different economic conditions and geopolitical uncertainties than other asset classes.

In 2022, gold was the best-performing asset class. In 2023, equities ruled the roost, with mid-cap and small-cap stocks delivering astounding returns, the report said.

Equity is the most preferred asset class with 39 percent of respondents picking it as their top choice. This is followed by debt and real estate at 20 percent each. Gold, at 10 percent, acts as an optimal portfolio hedge, report added.

“Gold bond served a dual purpose because you're getting a minimum interest plus you're being able to participate in the capital appreciation,” said Karan Bhagat, Founder, managing director and chief executive officer of 360 One.

Further, on the ESG front, the report said that 68 percent of survey respondent consider ESG as critical. “Investors are prioritizing sustainability in their portfolios, reflecting a conscious shift toward responsible investing,” report added.

More than 50 percent of UHNIs and HNIs stated that they were willing to invest 0-10 percent of their assets in ESG related investments, while 27 percent were likely to invest 10-20 percent, report added.