Reserve Asset Management
Central bank reserve managers around the world are responsible for investing trillions of dollars in financial assets. Although the appropriate asset allocation is unique to each institution, almost every reserve manager follows the mantra: safety, liquidity and return. Our analysis shows that gold compares favourably to other traditional reserve assets with respect to these guiding principles.
- Safety: Investing in relatively safe assets is one of the most important aspects of a central bank reserve manager’s job. As such, many reserve managers seek financial instruments, such as gold, that help preserve their capital, ensure diversification of their portfolio, adequately mitigate risks as much as possible, and serve as valuable collateral, should the need arise.