Gold and other precious metals play a vital role in Swiss wealth management, offering protection against inflation, systemic risk, and currency devaluation. These tangible assets have historically acted as safe havens in times of economic or geopolitical uncertainty. Today, they remain a key component of diversified portfolios, particularly for long-term investors focused on capital preservation and asset resilience.
Swiss private banks and independent asset managers provide access to gold and precious metals through various bankable formats. These include physical allocated holdings, exchange-traded products (ETPs), structured certificates, and Actively Managed Certificates (AMCs) that wrap exposure to metals in a custodian-compatible way.
Common Investment Formats
- Physical Allocated Gold: Fully backed, specific bars stored in secure Swiss vaults, often insured and verifiable
- ETFs and ETPs: Exchange-listed instruments that track spot prices of gold, silver, platinum, or palladium
- Structured Notes: Yield-enhancing products linked to precious metals with various payoff profiles
- AMCs: Bankable certificates that represent discretionary strategies involving precious metals, including dynamic allocation or mining equities
Advantages in Portfolio Construction
- Inflation protection: Precious metals often retain purchasing power during periods of monetary expansion
- Safe haven: Reduced correlation with equities and credit markets during stress scenarios
- Diversification: Enhances risk-adjusted returns by introducing a non-financial asset class
- Global liquidity: Gold and metals trade globally with transparent pricing and deep markets
Risks and Considerations
- No yield: Precious metals do not generate income, relying solely on price appreciation
- Storage fees: Physical holdings may incur vaulting and insurance costs
- Price volatility: Metals can exhibit sharp moves due to speculation or macro shifts
- Counterparty exposure: For synthetic products or structured notes, issuer risk must be considered
Comparison of Gold Investment Methods
| Format | Liquidity | Custody | Yield | Best For |
|---|---|---|---|---|
| Physical Allocated | Medium | Direct (vault) | None | Capital preservation |
| ETFs / ETPs | High | Bank custody | None | Liquid exposure |
| Structured Notes | Defined term | Bank custody | Conditional | Enhanced return |
| AMCs | Daily (typical) | Bank custody | Strategy-dependent | Custom allocation |
Who Allocates to Precious Metals?
- Family offices seeking wealth protection across generations
- UHNWI looking to hedge currency and geopolitical risk
- IAMs using gold as an alternative to bonds or cash during crises
- Advisors building inflation-resilient portfolios
Example Allocation
In a CHF 10 million balanced portfolio, a strategic gold exposure could include:
- 3% allocated to physical allocated gold in Swiss vaults
- 2% in a gold-backed ETF for liquidity
- 1% in a structured note with gold-linked upside
This configuration blends security, access, and potential yield while preserving precious metal exposure across market conditions.
Conclusion
Gold and precious metals remain relevant, trusted components of Swiss wealth management. Whether held physically, synthetically, or wrapped in AMC format, they contribute to portfolio resilience, currency hedging, and long-term value preservation. For clients seeking real assets with strategic purpose, precious metals provide a proven, globally recognised solution.
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Swiss Independent Wealth Management Blog
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