Strategist: Recommend a "Gold+" allocation of 45%, stocks 35%, bonds 0%

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Berenberg Bank strategists have proposed a rare asset allocation framework: 45% of the portfolio concentrated in physical assets centered on gold, 35% allocated to stocks, and zero allocation to bonds.

This framework is outlined in the latest research report by Berenberg’s UK-based strategist team. Chief strategist Jonathan Stubbs stated that easing relations among major powers is expected to support the ongoing strong rally in stocks. Meanwhile, the team admits that, given the considerable gains in international markets over the past month or so, "chasing stocks in the short term is quite difficult."

Specifically, the "gold+" basket accounts for 45% and includes gold, silver, and other precious metals, with an additional 20% allocated to commodities, and 35% invested in equities. The zero bond position comes from a systemic judgment regarding high sovereign debt, fiat currency depreciation, and persistent inflation risks. Equity allocation clearly favors international markets outside the US, taking a bearish view on the recent value of chasing US stocks.

This framework, focusing on "hard power, hard assets, and hard currencies," offers a differentiated perspective for investors seeking portfolio rebalancing, aside from the traditional multi-asset approach.

Zero Bond Position: Gold as Replacement for Traditional Safe-Haven Assets

Berenberg’s avoidance of bonds is clear and consistent. Stubbs said that since 2020, the team has adhered to the "stocks-gold barbell" structure, because they judge gold as "far more suitable as a hedging tool than bonds," believing their recommended gold exposure is consistently at the highest level among asset allocators.

The team believes that high sovereign debt, continual fiat currency depreciation, and the risk of "persistently high" inflation have created systemic headwinds for bonds. With the end of the zero-interest era and a dramatic shrinkage in negative-yielding bonds, the traditional role of bonds as a portfolio "ballast" has been fundamentally shaken.

The "gold+" basket mainly consists of gold and silver, supplemented by other precious metals, aiming to balance value preservation and liquidity needs, and has delivered notable returns in the context of sustained strength in gold prices.

Three Macro Pillars: Geopolitics, Fiscal Policy, and Inflation Drive the Strategy Logic

Berenberg’s strategy is fundamentally based on three macro themes: First, geopolitical disruptions covering major power rivalry and de-globalization; Second, fiscal dominance reflected in fiat currency depreciation, financial repression, and expansion of state power; Third is "persistently high," meaning sustained high levels of inflation, long-term rates, and commodity prices.

The combination of these three factors leads Berenberg to characterize the macro outlook as "soft and flat," with clear warnings of stagflation risks — with demand headwinds and supply shocks from the Iran war as core sources of pressure. Nevertheless, economic recession is not the team’s baseline scenario.

The strategy report also lists "six P" risk factors: Politics, Policy, Prices, Profit, People, and Pandemic, and alerts to potential risks from sovereign debt crises, food crises, and fiat currency collapse as black swan events. The team calls the current phase a "Trump paradigm shift," acknowledges its highly unpredictable nature, and stresses that any strategic assessment must take this as a key premise.

Stock Preference: Favoring International Markets, Pessimistic About Chasing Short-Term Gains

For stock allocation, Berenberg clearly favors global rebalancing trades — reducing US stock holdings and increasing allocations to international markets. This directional judgment has been evident since late 2024, with core support from expectations of continuing weakness in the US dollar.

However, following significant rallies in international equity markets over the past month, the team explicitly states that "chasing gains" in the short term is difficult, advising investors to remain prudent.

Sector Allocation: Utilities, Telecommunications and Transition Metals

At the industry level, Berenberg positions utilities and telecommunications as core positions, "weatherproof," and has been increasing commodity exposure since 2026. Stubbs and colleague O'Malley advise investors to "align with hard power sectors" to benefit from fiscal support and hedge against risks from AI disruption.

The team’s favored investment themes include transition metals like nickel, cobalt, and copper, as well as artificial intelligence and digital payments. This allocation approach aligns with Berenberg’s judgment that the commodity supercycle will continue — the team believes that the wave of global re-industrialization, rise of geopolitical power, and sustained energy demand will jointly support medium- to long-term commodity prices.

Risk Warning and DisclaimerThe market carries risks and investments require caution. This article does not constitute personal investment advice and does not take into account individual users’ specific investment goals, financial situations, or needs. Users should consider whether the opinions, views, or conclusions herein suit their particular situations. Investments made on this basis are at their own risk. ```