Hedging precious metals with impact investing

Md Akhtaruzzaman, Ameet Kumar Banerjee, Van Le and Faten Moussa

International Review of Economics & Finance, 2024, vol. 89, issue PA, 651-664

Abstract: Our study investigates the role of impact investing as a risk management tool for precious metals (i.e., palladium, platinum, gold, and silver) in calm and turbulent times. The findings show that impact investing and precious metals portfolios have higher hedging effectiveness. Furthermore, the results show that the hedging effectiveness for the portfolio of gold and impact investing increased during the COVID–19 crisis. Finally, we find that when factoring the transaction cost in portfolios of impact investing and precious metals, investors at various levels of risk aversion gain higher utility. These findings contribute to the literature and interest of investors, policymakers, fund managers, and regulators.

Keywords: Impact investing; Hedge ratio; COVID–19; Hedging effectiveness; Precious metals; SDG; Sustainable finance (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 G15 G23 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:89:y:2024:i:pa:p:651-664

DOI: 10.1016/j.iref.2023.07.047

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