Standard Chartered

Does the perfect hedge exist? Investors have long sought relatively stable assets that can help balance the more volatile asset classes in their investment portfolios. Gold, long woven into the commercial and cultural fabric of many societies around the world, has been a long-standing port of call for this purpose. Over time, though, modern finance has introduced several other options.

Across recent decades, high-quality bonds have offered a counter-ballast to equities, as have defensive currencies, such as the Japanese Yen and the Swiss Franc. Yet, instead of searching for a silver bullet for portfolio protection, we believe the answer lies in holding a safe-haven basket. To understand why, one must look at how individual safe havens have historically crumbled when investors relied solely on it.

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