Abstract
White precious metals have often been regarded as industrial raw materials in the past. With the introduction of the Silver ETF in 2006 and Platinum as well as Palladium ETFs in 2010, their role in asset allocation has become more and more important. This paper selects five countries with rapid economic development (BRICS) as the research scope. The authors select silver, platinum and palladium to test whether these three kinds of white precious metals have the effect of hedging risk in general asset (stocks, bonds and foreign exchange). The authors find that, first of all, the three white precious metals have no stable effect on the BRICS stock market. Second, silver can better hedge the bond market of the BRICS, the authors suspect that this phenomenon is related to the fact that silver is a traditional financial asset and its trading volume is large. Third, white precious metals are good hedge assets for foreign exchange investment. Finally, the authors find that platinum can reduce the yield variance of all portfolios, indicating that platinum is an investment target that can effectively reduce the variance of portfolio returns within the BRICS.
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This paper is supported by the Major Projects of the National Natural Science Foundation of China under Grant No. U1811462.
This paper was recommended for publication by Editor ZHANG Xinyu.
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Shen, C., Zhang, T. & Chen, Y. The Role of White Precious Metals in the Allocation of General Asset. J Syst Sci Complex 34, 1522–1537 (2021). https://doi.org/10.1007/s11424-021-0044-1
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DOI: https://doi.org/10.1007/s11424-021-0044-1