From the perspective of Geoff Howie, SGX’s market strategist, trading in the exchange traded fund (ETF) is just one of the several popular ways investors can protect their equities portfolio. It checks a few important boxes: easy to trade, accessible even for retail investors, and last but not least, it is a hedge against volatility of the equity markets.
SINGAPORE (June 5): When global stock markets suffered the selldown earlier this year, not all asset classes endured the same fate. From the start of the year till May 21, the Straits Times Index (STI) dropped from 3,222 points to 2,557 points, or by around 20%. On the other hand, the SPDR Gold Shares ETF, which is traded on the Singapore Exchange (SGX), went from US$143.45 to US$163.13 per unit, a gain of around 14%.
Gold outpacing the STI is not a recent occurrence. Last year, STI gained 9% but the SPDR Gold Shares ETF was up 17%. Gold remains the safe haven, be it during a virus outbreak or trade war.
