Berenberg Tells Investors To Put 45% In Gold, Silver And Bitcoin — Ditches Bonds Entirely

Berenberg is urging investors to allocate as much as 45% of their portfolio to gold, silver and Bitcoin, while cutting bonds entirely and limiting equities to just 35% in a high-conviction strategy built for inflation and geopolitical risk.

The UK-based strategists say the shift reflects a long-term view that traditional safe havens like bonds no longer offer reliable protection. Gold is now seen as a "far better hedge" amid rising debt and currency debasement, they noted.

What The 45% 'Gold Plus' Strategy Looks Like

The UK-based strategists believe that US President Donald Trump and China President Xi Jinping's meeting in May could support the ongoing US stock rally. Berenberg's barbell approach to portfolio building involves balancing both high and low-risk assets, with 45% allocated to a segment, which analysts termed as 'gold plus,' involving gold and silver as well as bitcoin. Another 20% is dedicated to investments in commodities and the remaining in stocks.

Lead strategist Jonathan Stubbs told a media outlet that Berenberg operated its asset management strategically instead of tactically. The German bank has adopted this investment strategy since 2020, as they see gold to be 'a far better and more appropriate hedge than bonds.'

Berenberg's exclusion of bonds is based on its take on high sovereign debt levels, fiat debasement trade, and rising risks of prolonged and elevated inflation.

What Drives Berenberg's Portfolio Strategy?

Berenberg developed its portfolio strategy based on multiple macroeconomic factors, including geopolitical dynamics, fiscal dominance covering currency debasement, financial repression, as well as forecast of prolonged elevated rates, inflation, and commodity prices.

Berenberg used these factors to devise the 'soft and flat' macro-outlook with a risk of stagflation due to demand headwinds and supply disruptions amid the Middle East conflict. While the brokerage bases its strategy on weaker guidance, it does not price in a recession in its base case assumption.

The brokerage also favours rebalancing stocks towards global equities from the US amid extended dollar weakness. While Berenberg showcased a global bias to portfolio building since 2024-end, but given markets have rallied hard in recent weeks, the team admitted they 'see equities as hard to chase near term.'

Berenberg's thematic strategy identified utilities and telecom sector as its 'whatever the weather' winners, while the brokerage continues to bump its commodity exposure this year. Analysts urge investors to 'stay aligned with hard power industries to benefit from fiscal support and to hedge AI disruption.'

Furthermore, Berenberg's model highlights metals like nickel, cobalt, and copper, as well as AI as themes that can be exploited by investors. Overall, the brokerage believes every investment advice should be scrutinized for value amid 'The Trumpian Paradigm Shift,' alongside risks related to politics, policy, prices, profit, people, and pandemic.

At the same time, Wells Fargo modelled a bull case scenario predicting the gold prices surging to $8,000 per ounce by the end of 2027. 'We're in the 4th debasement cycle that started in 2022,' wrote Wells Fargo strategist Ohsung Kwon. 'Following the recent pullback, gold is now closer to our model's fair value of $4,500, and all three drivers are likely to suggest further debasement from here.'

Disclaimer: Our digital media content is for informational purposes only and does not constitute investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks, and past performance does not guarantee future returns.