Multi-asset portfolios would benefit by adding a 4 to 6 percent silver allocation, according to new research by Oxford Economics.
This is one of several silver-related stories in the latest edition of Silver News published by the Silver Institute.
According to the Oxford Economics study, most institutional and individual investors hold about 0.2% of their portfolios in silver.
Silver is often overlooked in these asset allocation decisions in favor of gold despite having its own unique return characteristics.”
For the study, Oxford Economics compared silver’s historical performance with a range of traditional asset classes, including stocks, bonds, gold, and other commodities. They found that silver has a relatively low historical correlation with other asset classes with the exception of gold. This gives silver valuable diversification potential in investment portfolios.
Based on analysis of over 20 years of historic market data, our simulations indicate that an efficient investment portfolio would have had a 4.9% allocation to silver for a medium-risk investor. Moreover, looking forward to the next decade, our baseline economic projections and the strengthening structural demand outlook for silver indicates an even higher medium-risk optimal portfolio allocation to silver of 6%. With the average investment portfolio having only indirect exposure to silver of around 0.2% through a basket of commodities, this suggests that investment managers should consider the case for a more significant allocation to silver.”
The latest edition of Silver News also highlights some other fascinating technological advances utilizing the white metal, along with some developments in the silver market. Here are some highlights.
- A US company has developed a silver-graphite combination that combines the excellent electrical conductivity of silver with the lubrication of the graphite simultaneously increasing abrasion resistance. This reduces wear even with a high number of plugging and unplugging cycles. This could increase the use of silver in the electric car sector.
- Scientists at Lawrence Berkeley National Laboratory in California have developed a printed circuit board – the flat, rigid sheet that holds and connects electronic components in everyday items like smartphones, computers and TVs – that is fully recyclable and biodegradable. One of the features of the board is a printable conductive ink made of a polyester binder, which is biodegradable, and fillers such as silver flakes. The silver ensures that electricity is carried to all components on the board.
- Now, a group of Japanese scientists at Osaka Metropolitan University has developed a simple and rapid method to detect dangerous bacteria based on how different colors of light bounce off silver, gold and copper nanoparticles.
- Since 2021, Eastman Kodak has hired about 350 workers to help manufacture silver-based film in its Rochester, New York, facility to keep up with the growing demand for 35mm film. The company has openings for 75 more workers, according to Nagraj Bokinkere, Vice President of Industrial Films and Chemicals.
- A South African court has ruled that a British race car champion may keep 2,364 silver bars that he and his team salvaged from a steamer sunk off the coast of the Maldives in the Indian Ocean by Japanese torpedoes during World War II. The silver is valued at about $36.3 million,
- A silver-based sensor takes a new approach to infection detection. It not only detects the presence of a disease such as COVID-19, it can also detect its severity.
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