As the holiday season fades, many Kiwis are turning their attention to securing a prosperous year ahead. It’s worth considering a modest allocation to gold in a diversified portfolio, as the timeless precious metal continues to symbolise security and opportunity, aligning perfectly with New Year financial resolutions.
Anna Scott, chief executive of New Zealand investment fund manager Smart, says gold can provide stability as an investment during times when economic conditions are sluggish or when there is geopolitical uncertainty around the world. She calls it “the original alternative currency.”
Scott was speaking following the launch late last year of the Smart Gold ETF (exchange-traded fund). It is one of four new ETFs recently launched by Smart – the others are in bitcoin, US technology companies and the top 20 NZX-listed companies.
Smart is a wholly owned subsidiary of NZX Ltd and has more than $13 billion in funds under management. The newly added funds mean Smart now enables Kiwis to diversify their portfolios across more than 40 ETFs.
The gold, bitcoin and US tech ETFs are being offered in collaboration with iShares, the ETF arm of global investment manager BlackRock. Through the collaboration, investors can gain exposure to the price movements of gold, without having to buy, store, or manage physical gold themselves.
Scott says historically gold has been considered a stable, secure asset in times of crisis; it also does far better in periods of low growth and mild inflation and tends to serve as a diversifier in multi-asset portfolios.
“Although it is very much a hedge against inflation – and in the long term against a depreciating dollar and/or stock market risk – what is clear is that it can hedge against the most chaotic and uncertain events.”
She also notes that gold prices rallied sharply amid ongoing geopolitical fragmentation, and in times of global uncertainty, volatility, and fragility, gold can benefit. Thomas Taw, the Hong Kong-based head of the Asia Pacific Investment Strategy team at BlackRock, agrees that gold is “up there” as an investment during times of geopolitical crises.
“Gold has been around a long time and historically we’ve seen the price rise during times of geopolitical unrest, although in 2024 we have witnessed a number of peaks and troughs.”
Taw says gold is also considered a hedge in economic slowdowns. He notes that as investors see global growth slow down, BlackRock expects higher inflation over the medium term.
Scott says the collaboration with BlackRock’s iShares is important because it enables Kiwi investors to tap into their experience, global reach and their ability to track the price of gold in markets around the world while at the same time enjoying Smart’s local market knowledge.
“This makes it easy for Kiwis to invest in local or international markets and to create diversified portfolios with the aim of building long-term wealth; as we say at Smart ‘the wise invest Smart’.”
More from Smart:
The Smart Exchange Traded Funds are issued by Smartshares Limited (Smart). The product disclosure statements are available at smartinvest.co.nz. Investing involves risk. The value of your investments can go down as well as up. Returns are not guaranteed. We recommend you seek professional assistance from a licensed Financial Advice Provider before making any investment decision.
iShares® and BlackRock® are registered trademarks of BlackRock, Inc. and its affiliates (“BlackRock”) and are used under license. BlackRock makes no representations or warranties regarding the advisability of investing in any product or the use of any service offered by Smartshares Limited.
