AMP Ltd. has removed bonds from some of its Australian retirement funds and replaced them with gold [1].
The move signals a shift in traditional portfolio management. For decades, government bonds served as a primary hedge against equity market crashes, but the firm now believes that relationship has broken.
AMP manages $114 billion in Australian retirement assets [3]. The firm decided to cut bond holdings because sovereign debt is no longer offering the diversification investors have relied on for decades [1]. By pivoting to gold, the company aims to find a more reliable store of value that does not move in tandem with stock volatility.
This strategy change affects a portion of the company's pension offerings. The decision follows a period of global economic instability where government bonds failed to provide the expected cushion during market downturns [1].
Gold is traditionally viewed as a safe-haven asset during times of geopolitical or economic stress. By substituting bonds with gold, AMP is prioritizing a hard asset over government promises of repayment. The firm said that the lack of diversification in sovereign debt necessitated the change [1].
“Sovereign debt no longer offering the diversification investors have relied on for decades”
This shift by a major asset manager suggests a growing institutional distrust in the '60/40 portfolio'—the traditional strategy of splitting investments between stocks and bonds. If other large funds follow AMP's lead, it could increase global demand for gold and signal a broader market belief that government debt is no longer a reliable hedge against systemic risk.
