The Gold Exposure of Institutional Investors
51 Pages Posted: 17 Aug 2021
Date Written: August 16, 2021
What is the optimal weight of gold in an investment portfolio? Suggestions range from 0% to more than 20%, but there is no study that systematically investigates this issue. We analyze the gold holdings (gold ETFs) of institutional investors based on 13-F filings and find that 30% of all institutions have at least some exposure to gold in their portfolio, with an average percentage holding of 1.7% with large differences across institutions and over time. The results further identify key determinants of gold holdings and demonstrate that gold holdings positively affect the performance of institutional investor portfolios.
Keywords: Gold, institutional investors, portfolio diversification, safe haven
JEL Classification: G01, G11, G41
Suggested Citation: Suggested Citation