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Buying bullion is an excellent option for people considering investing in liquid alternatives, the World Gold Council (WGC) has claimed.

According to the organisation, gold exhibits many of the characteristics of ‘liquid alts’ but without a number of the disadvantages prone to this type of investment.

Liquid alts are a form of alternative investment, meaning they are asset classes outside of traditional bonds, stocks and currencies. They offer daily liquidity, which means they can be converted into cash by the next business day.

Precious metals are considered alternative investments, and the WGC said physical gold could be a top choice for people expanding their portfolio to include these assets.

Cost advantage: Vaulting costs for allocated physical gold are often lower than 50 basis points per year.

WGC said that when compared with typical mutual fund liquid alternative costs (1.9 per cent), gold offers similar investment characteristics at a much smaller outlay. Precious metals also benefit from easy market access.

Deeper liquidity: Gold is considered one of the most liquid assets available in global markets, with its average daily volume competing with major currency pairs.

Lack of cash drag: Liquid alts typically have cash at hand to satisfy investor redemption requests, which causes a performance drag relative to the benchmark. Investing in goldmeans no liquidity discount or cash drag.

Established reputation: Investment in gold has been studied and researched for many years. The precious metal has been freely traded since the 1970s and so has a long, successful track record compared with most liquid alts.

Director of Investment Research at WGC Juan Carlos Artigas said more people are expected to allocate portions of their portfolio to alternative investments in the near future.

“Based on our research, gold may be the ideal liquid alternative as it shares the same advantages of this unique sub-sector, without some of the inherent disadvantages,” he explained.

WGC promotes buying physical gold

Buying bullion is an excellent option for people considering investing in liquid alternatives, the World Gold Council (WGC) has claimed.

According to the organisation, gold exhibits many of the characteristics of ‘liquid alts’ but without a number of the disadvantages prone to this type of investment.

Liquid alts are a form of alternative investment, meaning they are asset classes outside of traditional bonds, stocks and currencies. They offer daily liquidity, which means they can be converted into cash by the next business day.

Precious metals are considered alternative investments, and the WGC said physical gold could be a top choice for people expanding their portfolio to include these assets.

Cost advantage: Vaulting costs for allocated physical gold are often lower than 50 basis points per year.

WGC said that when compared with typical mutual fund liquid alternative costs (1.9 per cent), gold offers similar investment characteristics at a much smaller outlay. Precious metals also benefit from easy market access.

Deeper liquidity: Gold is considered one of the most liquid assets available in global markets, with its average daily volume competing with major currency pairs.

Lack of cash drag: Liquid alts typically have cash at hand to satisfy investor redemption requests, which causes a performance drag relative to the benchmark. Investing in goldmeans no liquidity discount or cash drag.

Established reputation: Investment in gold has been studied and researched for many years. The precious metal has been freely traded since the 1970s and so has a long, successful track record compared with most liquid alts.

Director of Investment Research at WGC Juan Carlos Artigas said more people are expected to allocate portions of their portfolio to alternative investments in the near future.

“Based on our research, gold may be the ideal liquid alternative as it shares the same advantages of this unique sub-sector, without some of the inherent disadvantages,” he explained.

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