The safe-haven investments that have performed well during the current period of geopolitical upheaval in the Middle East are not the same as those that did so during other crises, according to an exchange-traded fund (ETF) provider.
Betashares noted the most well-known safe havens are gold, cash and United States government bonds, but the latter have not performed well since 7 October 2023.
“Gold is a traditional hedge against adverse economic and geopolitical events given it has historically maintained its value over time. Retail investors can access gold either through holding the physical asset or through an array of gold-related ETFs,” the firm said.
The US dollar and US bonds often outperformed during ‘black swan’ events, such as the 2008 global financial crisis and the eurozone debt crisis of the early 2010s, but this has not been the case during 2025 when gold has consistently outdone the other two safe-haven investments.
“One reason why this time might be different is because investors are concerned over the USA’s rapidly changing trade policy, as well as questions over its ability to pay down debt,” Betashares said.
Even if US bonds are not as popular as gold, Bank of America data showed that during the second week of June, just as the crisis kicked off, equity funds globally recorded US$10 billion in outflows, while bond funds attracted US$15 billion in inflows.
Another interesting trend observed by the ETF provider is the rotation out of US assets into other assets as opposed to just leaving the funds in cash.
Earlier this year, Betashares said there was some anecdotal evidence of a rotation into Asian technology stocks.
The Solactive Asia Ex-Japan Technology & Internet Tigers Index, which tracks a basket of select Asian technology stocks, rose by more than 37 per cent in the 12 months to 20 June 2025.
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