Stockspot has lowered its gold allocation from 14.8 to 12.3 per cent, marking its first structural change since 2021, as bonds once again offer stronger defensive qualities.
The firm said the move is a recalibration rather than a retreat from gold, which has been one of the strongest contributors to portfolio returns over the past four years.
Since Stockspot increased its allocation to 14.8 per cent in February 2021, the gold price has surged 148 per cent, rising from AU$2,350 to AU$5,840 per ounce, showing its best run since 1979.
Over the same period, Australian government bonds have declined as interest rates climbed.
Stockspot’s GOLD ETF has risen from $23.05 to $53.60 in just four and a half years, a performance that has helped its portfolios outperform peers and stay resilient during market volatility.
The higher weighting to gold has added roughly 4.8 per cent per year to returns since 2021.
Chief executive Chris Brycki said the decision to trim gold reflects a refresh of the firm’s strategic asset allocation to balance risk and return more effectively.
“Gold remains a core part of every Stockspot portfolio,” he said. “This adjustment is about reflecting today’s trade-offs and ensuring resilience across a wide range of market conditions.”
Stockspot initially increased its gold allocation when traditional portfolio relationships began breaking down. For decades, bonds reliably moved in the opposite direction to shares, providing diversification during market downturns.
Before 2021, the three-month rolling correlation between the two was negative about two-thirds of the time.
But as inflation expectations rose, that relationship reversed – shares and bonds began moving together roughly 85 per cent of the time, undermining bonds’ hedging power, according to the platform.
Gold, by contrast, was being largely overlooked by investors and central banks, which made it an attractive alternative hedge. Its historical resilience in inflationary and uncertain environments made it a key stabiliser in Stockspot’s portfolios during this period.
The firm said the latest reweighting does not signal a view that gold has peaked but reflects changing dynamics.
Gold has recently shown greater correlation with Australian shares, slightly reducing its diversification benefit.
According to Brycki, reallocating a portion of the holding back into bonds, which now offer more compelling defensive yields, is intended to restore portfolio balance.
“By trimming gold to 12.3 per cent, we are resetting the strategic mix to an optimal level for the current environment,” Brycki said. “Bonds today offer better defensive qualities than they did several years ago, while gold’s outsized role in cushioning portfolios has moderated.”
Even after the reduction, Stockspot’s gold weighting remains significantly higher than most diversified or superannuation funds, which typically hold less than 1 per cent in gold.
Brycki noted that according to Bank of America research, 71 per cent of US financial advisers allocate less than 1 per cent to gold, and fewer than 1 per cent allocate more than 10 per cent.
Stockspot said its reallocation aims to ensure portfolios remain diversified and resilient as global markets transition into a new phase marked by moderating inflation and more stable correlations between asset classes.
