The second occasion that demonstrated strategic allocation was later that year, with the November 2020 rally in global markets that saw the Straits Times Index surge 16%, with S$1.4 billion of net fund inflows into Singapore stocks. The unit price of the SPDR Gold Shares ETF declined 5% over the month. In November 2020, global stocks struck record performances attributed to vaccine developments that met optimistic WHO timelines. While pundits called risk-on, the SGX-listed SPDR Gold Shares ETF also attracted S$54 million of fund inflows, which still represents the highest monthly inflows for the ETF since 2019. This indicates that the risk-on was not without blinders, as the fresh foot forward by global investors that month did include fund inflows to the SPDR Gold Shares ETF.

The next highest monthly inflow to the SPDR Gold Shares ETF over the past 34 months was in September 2020, with S$33 million of fund inflows, which followed the above mentioned six months of outflows. In September 2020, the unit price of the ETF declined 4% and global stocks also declined for the first month in six months. The preceding month of August 2020 also produced the second highest monthly trading turnover for the SPDR Gold Shares ETF since 2019. However, August 2020 saw the ETF ultimately book more outflows than inflows.

The third highest monthly fund inflows over the period, at less than a quarter of the fund inflows seen in November 2020, was in April 2022, at S$13 million. During that month, the price of gold declined 2%, however at the same time, in what was seen as a signature risk-off month for the United States, the FTSE Developed Index declined 8%, following a 3% gain in the preceding month. March 2022 also produced the third highest monthly trading turnover for the SPDR Gold Shares ETF since 2019, however ultimately the ETF also booked more outflows than inflows that month.

Overall, the SPDR Gold Shares ETF has seen more fund outflows than fund inflows over the 34 months since 2019, with total fund outflows of S$500 million. This has seen the AUM of the ETF decline 22% from S$1.45 billion to S$1.15 billion. During this time, the SPDR Gold Shares ETF generated a 12% gain, while the FTSE Developed Index generated a comparative 20% total return, both in SGD terms.

This indicates that the SPDR Gold Shares ETF had been somewhat utilised as a store of value in portfolios prior to 2020, with investors booking gradual fund outflows over the ensuing 34 months, possibly rotating into other assets such as equities or fixed income. For instance, while the AUM of the SPDR Gold Shares ETF has declined 22% amid a slew of ETFs listed in recent years, it now comprises 11% of the total AUM across the SGX-listed ETF markets. For the 11 of the 34 months that saw fund inflows, there were both gains and declines in corresponding equity markets, however the fund inflows generally corresponded with some level of significance, or size to the gains or declines.

Like most asset classes, the SPDR Gold Shares ETF takes cues from the impact of global growth deceleration, persistent inflation, and geopolitical headwinds. The gains of the US dollar and US Treasury yields over the first 10 months of 2022, have made it more expensive for investors to purchase US dollar denominated gold, while higher US Treasury yields mean greater opportunity costs to investors holding gold. These are two key factors that have weighed the price of gold over the first 10 months of 2022, when some might have thought the ETF would provide gains due to being touted as an inflation hedge in preceding years.

The SPDR Gold Shares ETF was trading at US$170 per unit at the end of 2021, and was 11% lower, near US$152 per unit at the end of October. The key variable was US dollar appreciation, with the US Dollar Index gaining 17% over the 10 months. Thus, in JPY, CNY, and EUR terms, the ETF gained 16%, 3% and 3% respectively for the first 10 months of the year. In INR terms, the ETF maintained its value over the 10 months with flat returns, and in SGD terms the ETF declined 6%. With China and Japan not pursuing tightening monetary policy, the ETF provided a diversified asset and diversified currency investment for onshore portfolios.