HSBC analysts have identified the euro as a strong safe-haven asset in turbulent markets—second only to gold—based on a comprehensive statistical analysis of asset performance across multi-asset portfolios.
In their latest report, HSBC said, “Gold remains the top safe-haven asset,” but noted that “the euro has emerged as the next strongest performer.” Their findings are based on simulations using bootstrapped return data and millions of hypothetical portfolio outcomes.
The analysis showed that the euro now rivals the traditionally defensive Swiss franc (CHF) in terms of protection during market stress. While the euro’s advantage over the franc is narrow, HSBC emphasized that the euro clearly improves risk-adjusted returns in diversified portfolios.
This research comes amid heightened market volatility and policy uncertainty. So far in 2025, markets have faced sudden policy shifts and unpredictable correlations, complicating reliance on conventional safe havens like developed market (DM) interest rates.
HSBC noted that DM rates, once seen as a reliable hedge against equity risk, no longer show consistent defensive qualities.
When analyzing different portfolio allocations, HSBC found that short-term interest rates offered the best return-to-risk profile in unconstrained scenarios. However, when factoring in realistic equity weightings (40–60%), gold and the euro stood out as top safe-haven assets.
The bank highlighted that its methodology focused on bootstrapping expected returns, rather than relying on assumptions about shifting correlations—believing this to be a more effective way to model portfolio outcomes in volatile environments.
In conclusion, HSBC said the euro’s resilience and consistent performance under stress point to its growing value as a defensive asset in multi-asset portfolios.
