2025’s story has some run left, but it’s fair to say that tariff turbulence has been a key story. Investors saw U.S. stocks swoon in the spring, while foreign equities spiked. While many investors continue to look away from the United States to diversify, those markets present their own risks. With questions about each major equity space and significant doubts on the yield curve, revisiting gold ETF investing may prove a shrewd move.
Tariffs don’t just pose risks to the major performance drivers in tech stocks; they also loom over categories as varied as consumer goods and industrials. Supply chain pain and rising consumer debt may induce the Federal Reserve to consider September rate cuts, but stubborn inflation may hold off relief.
That uncertainty around rates also casts a shadow of doubt over fixed income offerings. While core allocations remain a smart investment, and income ETFs can help, timing duration plays poses some thorny questions. Even looking abroad poses issues. A U.S. recession would have painful knock-on impacts around the world, with tariffs, too, potentially impacting currency matters elsewhere.
All that said, then, where might investors look for real diversification? The yellow metal, even more so than other alternatives, remains a powerful way to protect investments. Where real estate, for example, risks exposure to rising materials costs, gold’s commodity status means mining drives much of its price.
The Goldman Sachs Physical Gold ETF (AAAU) offers one strong candidate in the gold ETF space. The fund tracks the gold spot price, providing physical exposure to physical gold. That direct exposure could make it a strong option for gold commodity plays. The AAAU has returned 27.5% YTD, per ETF Database, a strong performance that beats its averages. Its ETF Database Category and FactSet Segment averages returned 24.5% and 15.4% in that same period, respectively.
Looking ahead, AAAU could intrigue as a source of diversification. For those looking at their options to add some padding, gold may be worth watching.
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