iShares ETFs cover a broad range of asset classes, risk profiles and investment outcomes. To understand the appropriateness of this fund for your investment objective, please visit our product webpage.
Find out more about iShares Physical Gold ETF:
https://www.blackrock.com/au/products/332696/
This product is likely to be appropriate for a consumer:
• Who is seeking capital preservation and/or capital growth
• Using the product for a minor allocation of their portfolio or less
• With a minimum investment timeframe of 5 years, and
• With a high to very high risk/return profile
Getting granular
In the new regime of greater macro and market volatility, investors are becoming more granular with their portfolio allocations and searching for new ways to diversify risk.
iShares Physical Gold ETF (ASX: GLDN) offers a low-cost and direct way to gain exposure to gold – long regarded as a hedge against uncertainty - without needing to own gold bullion. All for a low management fee of 0.18%.
A safe haven asset during times of volatility
Gold has historically acted as a safe haven asset during times of market volatility while offering a similar historic risk/return to equities over the long run.
Unlike cash, which can lose value in the face of inflation, gold has a sense of everlasting value. Its physical properties as a valuable precious metal, scarcity, and role in the international monetary system has cemented its ability to help preserve wealth and purchasing power through the ages.
As seen in the chart below, gold’s popularity soared in 2025 as investors faced an environment of extreme uncertainty marked by changes in trade barriers, stretched tech valuations and geopolitical conflicts.
2025 asset class performance*
Source: BlackRock, Bloomberg, as of 30 November 2025. The bars show the total returns in local currency terms, except for currencies and commodities, which are spot returns. Developed market equities is represented by MSCI World ex AustraliIndex (AUD), Australian equities by S&P/ASX 300 Index, US equities by S&P 500 Total Return Index, Japanese equities by Nikkei 225 Index, European equities by EURO STOXX 50 Index, Emerging market equities by MSCI EM Emerging Markets IMI Index, Chinese equities by CSI 300 Index, GREITs by FTSE EPRA Nareit Developed ex-Australia Rental AUD Hedged Net Tax Index, Global listed infrastructure by FTSE Developed Core Infrastructure 50/50 100% Hedged to AUD Net Tax Index, Australian nominal bonds by Bloomberg AusBond Composite 0+ Yr Index, Australian inflation-linked bonds by Bloomberg AusBond Infl Govt 0+ Yr Index, Global aggregate bonds by Bloomberg Global Aggregate Index (hedged AUD), Global high yield by Markit iBoxx Global Developed Markets Liquid High Yield Capped Index(AUD Hedged), EM debt by J.P. Morgan EMBI Global Core Index(AUD Hedged), Cash by S&P/ASX Bank Bill Index, Commodities by Bloomberg CommodityIndex Total Return, Gold by XAU/USD, Iron ore by Historical TSI Iron Ore CFR China 62%, and Oil byWTI Crude Oil.
An allocation to gold can help investors build portfolio resilience by generally offering downside protection during economic and financial uncertainties.
Gold as a diversifier
The most recent ASX Australian Investor Study shows that while 58% of Australian investors invest in domestic shares, only 16% invest directly in international shares. In other words, Australians exhibit a high degree of home bias when it comes to investing.1
This is where unhedged gold can help shine a light in your portfolio. In the foreign exchange market, gold is bought and sold in USD. As such, an allocation to gold helps add diversification to the average Australian investor’s portfolio.2
Diversification isn’t simply about owning a range of different types of investments - it’s about having investments that respond differently to changes in the market. If one investment declines, others might then help to balance out some of those losses. A low correlation means that two investments act differently in the same situation, while a higher correlation means they generally behave quite similarly in most scenarios.
As illustrated below, gold has a low correlation with global shares and Australian shares and bonds, and only a moderate correlation to global bonds. This means assets like gold can serve as a good diversifier to provide additional ballast for your portfolio.
Gold correlation to major indices, 2015-2025
Source: World Gold Council. Based on monthly returns for gold (represented by LBMA Gold Price), Australian shares (represented by MSCI Australia Index), Global bonds (represented by Bloomberg Global Aggregate Index) and Australian bonds (represented by ICE BofA Australia Corporate Index) from 31 December 2015 – 31 December 2025.
Gold is highly liquid
Liquidity is the ease in which an asset can be converted to cash without suffering a deep price discount.
It sounds counter-intuitive, but gold is one of the most high-quality liquid assets available. There has historically always been demand to buy and sell gold. Following surging investor interest in 2025, the total market capitalization of the global gold market surpassed US$30 trillion – more than the world’s largest stocks, NVIDIA, Microsoft and Apple.3
What this means is that during times of market stress, if you find that it has become difficult to immediately sell your property or certain currency exposures, you should find it relatively easier to sell your gold investments.
Indeed, this type of behaviour has been shown by central banks in the years following the COVID pandemic. As seen in the chart below, central bank demand for gold across the globe soared amidst a series of geopolitical shocks such as the Russian-Ukraine War, US-China Tensions, and Israel-Hamas War, and many emerging market central banks seeking to reduce their reliance on U.S. dollar reserves. While demand started to slow in 2025 as the gold price rose rapidly, it still remains structurally higher than in the pre-COVID years.
In this light, gold acts as an important liquidity buffer – an asset class to easily transact in and out of without being subject to extreme changes in price.
Central bank gold demand, 2017-2025
Source: World Gold Council as of 30 September 2025. Based on central bank gold demand volumes from 1 July 2017 to 30 September 2025.
