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Investing.com -- The euro is proving to be a robust safe haven in volatile markets, second only to gold, according to HSBC analysts, who used a statistical approach to rank assets by their ability to protect multi-asset portfolios.
“Gold stands out as the strongest safe haven,” HSBC wrote, based on simulations using bootstrapped returns and millions of portfolio outcomes. However, they added that “the EUR emerges as the next strongest safe haven.”
HSBC said the euro’s protective qualities are now statistically on par with the traditionally defensive Swiss franc.
“While the EUR’s edge over the CHF is marginal, this is clear statistical evidence that it can enhance outcomes in multi-asset portfolios,” the analysts said.
The study comes at a time of high uncertainty. “Markets have had to contend with sharp policy changes and U-turns so far in 2025,” HSBC noted, with shifting correlations making it harder to rely on conventional safe-haven assets like developed market rates.
“DM rates – a once reliable safe haven – struggles to show clear evidence as an effective equity hedge,” stated the bank.
The firm evaluated different allocation scenarios and found that front-end rates had the best return/risk profile in unconstrained portfolios.
But once realistic equity allocations of 40–60% were included, gold and then the euro are said to have ranked highest.
HSBC’s methodology involved bootstrapping expected returns and running millions of simulations.
“Bootstrapping expected returns is much more important than making any changing assumptions on correlations,” the firm said.
Overall, the euro’s resilience in mixed-asset portfolios highlights its growing role in times of stress, HSBC concluded.