Even less?
Despite the huge rally, US financial advisors do not allocate to gold
There are certain charts that never fail to surprise. And the one at the center of this column is guaranteed to raise some eyebrows. How is it possible that, even after another spectacular year for gold, so few professional investment firms allocate capital to the precious metal?
Zero!
The chart below reveals a staggering fact: in 2024, 75% of U.S. financial advisors had either zero or a negligible (less than 1%) allocation to gold. Just over 20% of surveyed advisors held between 1% and 5% of their portfolios in gold. Anything above that? Practically non-existent.
It’s hardly an exaggeration to say that U.S. financial advisors show little to no enthusiasm for allocating client capital to gold. Other surveys confirm the same trend: over 70% of major U.S. asset managers simply do not invest in gold. In Europe, access to gold is often entirely blocked by fund mandates or compliance restrictions.
A Decline in Allocations
What I find especially baffling is that gold allocations have actually declined over the past year. With 75% of advisors allocating less than 1% to gold, this figure is now at its highest level since 2019. I honestly wonder how they explain this to clients who rely on their expertise.
The only plausible explanation is profit-taking. But considering that I came across this chart in a report from April 2024, it suggests that many advisors had already cut back their gold positions early in the price rally—before gold surged even higher.
And yet, the strong price increase we’ve seen is far from the only reason to invest in gold. 2024 has been filled with undeniable signals that justify its place in a portfolio:
✅ Global debt levels are skyrocketing
✅ Inflation risks remain above average
✅ Central bank gold purchases are surging, particularly in emerging economies, led by countries that are less enthusiastic about the U.S. dollar
Risk-Return Considerations
If you take a step back and analyze both risk and return characteristics within the context of a well-diversified portfolio, gold stands out even more.
📈 Over the past 50 years, gold has outperformed bonds.
⚖️ Meanwhile, bond volatility has surged relative to both gold and equities.
🔄 Investors consistently overestimate the diversification power of bonds, making the case for gold even stronger.
In other words, you need a very compelling argument to justify excluding gold entirely from a portfolio.
Questionable Allocations
So where do these seemingly irrational allocation decisions come from? I can think of several explanations:
🔹 Ignorance – Many investors present themselves as professionals, yet their actual level of expertise varies greatly.
🔹 Denial – I’ve lost count of how many times I’ve heard professional investors dismiss gold with "I can’t invest in an asset class that doesn’t generate cash flows."
🔹 Investment Universe Constraints – After first loading up on private equity, then chasing private debt (which, unsurprisingly, hasn’t delivered as promised), some institutional investors are now retreating back to the core: stocks and bonds. That this mix is outdated is not something I need to point out—the data speaks for itself.
🔹 Sustainability Bias (especially in Europe) – Just as the rest of the world moves past an overly rigid ESG focus, European asset managers remain locked in, tightening restrictions under an endless stream of Brussels regulations.
A Major Opportunity
In short, when U.S. financial advisors and their asset management counterparts finally take a hard look at the data, they’ll see plenty of room for improvement when it comes to allocating to gold.
It will be interesting to see how long it takes for them to finally catch up.
Interested in the Blokland Smart Multi-Asset Fund?
Contact me at jeroen@bloklandfund.com or visit the website.
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Kind regards,
Jeroen
