The Case for Gold in Investment Portfolios

Many investors today view gold purely as a speculative asset due to its recent strong rally. In reality, gold plays a much broader role in portfolio construction. Rather than being solely a growth asset, gold can also serve as a defensive allocation that enhances portfolio resilience across different economic environments.

Below are several reasons why gold may deserves a place in a diversified investment portfolio.

1. Gold Has Delivered Good Long-Term Returns

Although gold is often categorized as a defensive asset, its long-term performance has been surprisingly strong. Gold outperformed the STI in 7 of the past 10 years and the S&P 500 in 4 of the past 10 years, based on annual returns.

Gold has delivered strong performance over 3-year, 5-year and 10-year annualised periods. For example, gold recorded a 3-year annualised return of 41.9%, significantly outperforming the S&P 500 at 21.6% and the STI at 21.2%.

This highlights an important point: gold should not be viewed merely as a traditional hedge within a portfolio. It can also contribute meaningfully to long-term portfolio returns.

Table: Gold vs STI vs S&P 500 Index vs Bond ETFs Performance

Source: Bloomberg, Tiger Brokers, End Feb 2026

Gold is represented by the LBMA Gold Price AM

2. Gold Acts as a Safe-Haven Asset During Market Stress

Historically, gold has performed well during major financial crises and stock market corrections.

During periods of uncertainty, investors tend to move capital into assets that are perceived as safe stores of value. Gold often benefits from this shift in investor sentiment.

Examples of such periods include:

• COVID-19 pandemic

• Global financial crises

• Geopolitical conflicts

• Currency instability

• Banking system stress

In many of these scenarios, gold has outperformed broad-based equity markets such as the STI and the S&P 500.

For this reason, gold can serve as a valuable risk-off asset within a diversified portfolio, helping investors manage uncertainty and reduce overall portfolio risk.

Table: Performance during stock market crashes

Source: Bloomberg, Tiger Brokers, End Feb 2026

Gold is represented by the LBMA Gold Price AM.

3. Gold Improves Portfolio Diversification

One of gold’s most valuable characteristics is its low correlation with equities. Based on 15 years of weekly data, gold shows very low correlation with equity markets, with a correlation of 0.10 with the S&P 500 and 0.11 with the STI, highlighting its effectiveness as a diversification asset in investment portfolios. Gold behaves differently because its drivers are not tied directly to corporate earnings or credit cycles. However, in periods of financial stress, both asset classes can sometimes fall simultaneously.

Adding a small allocation to gold may improve portfolio diversification while lowering volatility and reducing drawdowns.

When gold is combined with equities in a diversified portfolio:

• Portfolio drawdowns tend to be smaller

• Recovery periods after market declines are often faster

• Long-term returns can remain comparable while risk is reduced

This means investors do not necessarily sacrifice returns by adding gold — they simply improve the risk-adjusted performance of their portfolio.

Table: US Equities + Gold Portfolio Performance

Source: Bloomberg, Tiger Brokers, End Feb 2026

U.S. Bonds are represented by the iShares Core U.S. Aggregate Bond ETF, Gold is represented by the LBMA Gold Price AM.

Table: SG Equities + Gold Portfolio Performance

Source: Bloomberg, Tiger Brokers, End Feb 2026

SG Bonds are represented by the ABF Singapore Bond Index Fund, Gold is represented by the LBMA Gold Price AM.  

4. Rising Global Debt Supports Long-Term Gold Demand

Another structural driver for gold is the expansion of global debt.

Global debt has now exceeded $348 trillion, raising concerns about fiscal sustainability and long-term currency stability.

As debt levels rise, governments face increasing pressure from:

• Higher interest payments

• Persistent fiscal deficits (New debt to pay old debt)

• Slower economic growth

In such environments, policymakers may resort to measures that weaken currencies over time, such as higher inflation or monetary expansion. As gold carries no default risk and cannot be printed, investors often turn to it as a hedge against potential currency debasement.

5. Central Banks Are Increasing Their Gold Reserves

In recent years, central banks around the world have been steadily increasing their gold holdings.

One key catalyst was the freezing of roughly $300 billion in foreign reserves held by the Russian central bank following geopolitical sanctions in 2022. This event highlighted an important risk: foreign currency reserves can be frozen or restricted.

Gold, however, is a neutral reserve asset that is not dependent on another country’s financial system.

As a result, many central banks have been increasing their gold reserves as part of a broader effort to diversify away from traditional reserve currencies. This structural demand from central banks provides additional support for gold prices over the long term.

Source: World Gold Council 

Conclusion

Gold should not be viewed purely as a speculative asset. Instead, it plays a strategic role in portfolio construction by helping investors navigate an increasingly uncertain global environment. Through its ability to provide diversification, reduce portfolio volatility, act as a safe-haven during crises, and hedge against currency debasement, gold remains a valuable component of a diversified investment portfolio.

We will be conducting a Gold ETF event to share more about the LionGlobal Singapore Physical Gold ETF at the SGX Auditorium. Please find more details below.

Introducing the LionGlobal Singapore Physical Gold ETF*

The LionGlobal Singapore Physical Gold ETF* $Lion SG Phy Gold US$(GLU.SI)$ $Lion SG Phy Gold S$(GLS.SI)$ is the first gold ETF backed by physical gold, insured and vaulted in Singapore. The Fund seeks to track as closely as possible, before fees and expenses (including, but not limited to, hedging costs where applicable), the performance of the LBMA Gold Price** AM. The Fund invests at least 90% of its assets in physical gold.

Beyond the Sparkle: Gold as a Strategic Anchor Event!

We are excited to invite you to the Beyond the Sparkle: Gold as a Strategic Anchor event hosted by SGX Group. Hear from Mr. Ong Xun Xiang, Head of ETFs at Lion Global Investors, and Mr. James Ooi, Chief Market Strategist of Tiger Brokers (Singapore), as they share perspectives on the current gold market outlook and deep dive into the LionGlobal Singapore Physical Gold ETF*.

The session will be moderated by Mr. Kang Wei Chin, Director of Securities Trading at SGX Group.

Date: 12 March 2026 (Thursday)

Time: 7pm - 8.30pm (Registration @ 6.30pm)

Venue: SGX Auditorium

Register via: https://www.eventbrite.com/e/beyond-the-sparkle-gold-as-a-strategic-anchor-tickets-1982421213214

Special Promotion

Receive up to S$20^ Cash Coupon when you subscribe to the LionGlobal Singapore Physical Gold ETF*.

^Limited to the first 300 users. Limited to one reward per user

^The cash coupon will be credited to qualified accounts after a minimum holding period of one (1) month from the listing date (Listing date : 26 March 2026)

How to subscribe?

The LionGlobal Singapore Physical Gold ETF*  will be available for subscription from 6 to 19 March 2026. If you're interested in learning more about the LionGlobal Singapore Physical Gold ETF*, please find additional information via the link below.

Product Highlights Sheet and Prospectus:

https://eservices.mas.gov.sg/opera/Public/CIS/ViewProsDetail.aspx?prosID=fb87479ccdc64ef7a2b1eaa164fd5ffd

*Refers to ETF USD Class which is tradable in both SGD (SGX ticker: GLS) and USD (SGX ticker: GLU) on SGX.

**LBMA GOLD PRICE IS A TRADEMARK OF PRECIOUS METALS PRICES LIMITED, LICENSED TO ICE BENCHMARK ADMINISTRATION LIMITED (IBA) AS THE ADMINISTRATOR OF THE LBMA GOLD PRICE, AND IS USED BY LION GLOBAL INVESTORS LIMITED WITH PERMISSION UNDER LICENCE FROM IBA

Terms and Conditions for S$20* Cash Coupon Campaign Rewards

• Users who subscribed to LionGlobal Singapore Physical Gold ETF* (SGX ticker: GLU) during the Campaign Period and hold their investment in the fund for a minimum of one (1) month from the listing date will be rewarded with a Cash Coupon based on their total subscription amount.

• The rewards will be credited to your account within 10 business days after the 1 month holding period from listing date (Listing date: 26 March 2026).

• The Cash Coupon reward is limited to the first 300 customers.

How to subscribe to the IOP on Tiger Trade App

1. Open your Tiger Trade App Portfolio page, then tap "More"-"IPO".

2. Tap on "SG"

3. Tap "Subscribe" for LionGlobal Singapore Physical Gold ETF*

4. Input your intended subscription amount and Tap "Subscribe Now".

Other notes

• This promotion reward does not conflict with other Tiger Brokers campaign rewards in the same period.

• For further inquiries, please call our customer service hotline (65) 63312277 or consult our online customer service via https://www.itiger.com/sg

• Tiger Brokers reserves the right, at its sole discretion, to determine the eligibility of participants for the Campaign or receipt of rewards. The decisions of Tiger Brokers on all Campaign-related matters are final and binding on participants. Tiger Brokers is under no obligation to disclose any Campaign-related matters or results to the participants.

• To withdraw any proceeds generated from reward(s) received through this campaign, clients must have completed at least 10 trades since the opening of their account, which does not include trades less than USD 3 or exchange currency.

• Each account can only register once.

• Please refer to https://www.itiger.com/sg/commissions/fees for details of fee charges.

Disclaimer - Tiger Brokers (Singapore) Pte Ltd

• Tiger Brokers reserves the right, at its sole discretion, to determine the eligibility of participants for the Campaign / Promotion or receipt of rewards. The decisions of Tiger Brokers on all Campaign / Promotion-related matters are final and binding on participants. Tiger Brokers is under no obligation to disclose any Campaign / Promotion-related matters or results to the participants.

• Tiger Brokers is not responsible for any injury, loss, damage, or expense incurred by any participant or any other person in connection with the Campaign / Promotion. This includes, but is not limited to, losses (including lost opportunities) resulting from late or non-notification, computation errors, technical issues, hardware or software malfunctions, incorrect transactions, lost or unavailable network connections, or misdirected notices.

• By participating in this Campaign/Promotion, participants agree to release and hold Tiger Brokers harmless from any liability for any injuries, losses, or damages of any kind to any person or property arising from:

• the awarding, acceptance, receipt, possession, use, or misuse of any rewards or parts thereof awarded pursuant to the Campaign; and

• participation in the Campaign or promotion-related activities.

• Tiger Brokers may, at any time and without prior notice, amend, modify, delete, or add to these Terms and Conditions, suspend or terminate the Campaign / Promotion, substitute the rewards, or alter the Campaign / Promotion's conduct without any liability to any person.

• In case of any inconsistency between these Terms and Conditions and any marketing or promotional materials related to the Campaign / Promotion, these Terms and Conditions shall prevail.

• These Terms and Conditions should be read alongside the Tiger Brokers Customer Agreement, which applies to all participants.

• These Terms and Conditions are governed by and construed in accordance with Singapore law, and the Singapore courts have exclusive jurisdiction.

• Any person who is not a party to any agreement governed by these terms and conditions shall have no right under the Contracts (Rights of Third Parties) Act 2001 to enforce any of these terms and conditions.

• The information provided herein or any associated discussions, comments, or posts by author or other users is for reference only and does not constitute, and should not be considered as:

  a) an offer, recommendation, or solicitation to purchase or sell any financial products or services; or

  b) a proposal to make any financial decisions; or

  c) any investment advice.

• The information provided is for general information purposes only, which does not consider your own investment objectives, financial situations or needs.

• Tiger Brokers assumes no responsibility or warranty for the accuracy and completeness of the information; investors should do their own research and may seek professional advice before investing.

• Investing in financial products always involves inherent risks of loss. Tiger Brokers accepts no liability for any losses related to investors' investment activities. Past performance does not guarantee future results.

Disclaimer – Lion Global Investors Limited

This advertisement has not been reviewed by the Monetary Authority of Singapore. It is for information only and is not a recommendation, offer or solicitation. You should read the prospectus available at www.lionglobalinvestors.com before deciding whether to invest in the fund. The Fund's net asset value may have higher volatility due to its narrower investment focus (primarily in Gold as defined in the prospectus), when compared to funds with more diversified portfolios. Please refer to the Prospectus for further details, including a discussion of certain factors to be considered in connection with an investment in the listed units of the Fund on the SGX-ST. Investments involve risks including the possible loss of the principal amount invested. Lion Global Investors® Limited (UEN/ Registration No. 198601745D).