eToro: Gold is replacing traditional stable, low-risk assets as a portfolio hedging tool

eToro analyst Lale Akoner points out that as investors seek new ways to hedge equity risk, gold is increasingly replacing traditional stable, low-risk assets—long-term government bonds—as a portfolio allocation choice. "Historically, duration exposure has helped buffer against declines in risky assets. However, the recent simultaneous sell-off in both stocks and long-term bonds has eroded investor confidence in bonds as a reliable hedging tool in critical moments," she says. She suggests that investors are therefore replacing bond exposure with gold in their portfolios, indicating a broader rethinking of portfolio risk management. (Jinshi)