What do you do when you’re sure global stocks are running out of gas, rising rates are about to pummel bonds and your models show the only emerging market worth a bet is India? You buy gold, of course.

Fritz Folts did just that earlier this year after slashing his holdings of exchange-traded funds backed by stocks and cutting to zero his exposure to broad emerging-market ETFs, focusing instead on the U.S. and Japan. He says the positive growth momentum and favorable investor psychology that drove equities in 2017 diminished this year, and markets aren’t paying enough heed to the next round of U.S. Federal Reserve hikes.

“2017 has left the building,” said Folts, 60, who oversees $800 million as chief investment strategist and managing partner at 3EDGE Asset Management LP in Boston. The Total Return Strategy portfolio posted an average annual return of 9.03 percent since January 2016, when the firm began with $100 million of assets under management.

Folts, a three-decade industry veteran, said in a phone interview last week that gold is the best place to absorb external shocks amid increased volatility stemming from global trade tension and he has invested in the commodity through various ETFs. The precious metal rose more than 1 percent during the past month as trade-war bombast spurred a rout in global stocks.

He has a minimal exposure to fixed income, mostly U.S. Treasuries and ultra-short ETFs with duration under a year. He’s been bearish on debt since July amid prospects for higher rates.

In emerging markets, the firm’s only investment left is ETFs focused on India and Indian infrastructure. Folts says favorable demographics and a strengthening economy will support stocks.

It’s all an abrupt shift from the early days of 3EDGE, founded by a team from Windhaven Investment Management. At the time, it favored broad emerging-market ETFs while buying country-specific funds in places the firm wanted to be overweight. That was the case in late 2016 for Brazil, when 3EDGE poured cash into ETFs focused on the country and also a small-cap fund to be more exposed to the domestic economy, closing that bet in mid-2017 after Brazilian stocks and currency topped world gains.

All that said, stocks could still surprise on the upside, Folts said. He still says emerging and frontier markets can produce positive returns in the long term, after the current bout of volatility subsides. He’s monitoring the market for any catalysts that could revive growth momentum, such as a more dovish tone from the Fed at its next meeting or surprisingly strong corporate earnings. Still, this year will probably fall short in terms of returns.

“We will definitely have more volatility this year,” Folts said. “And gold can help us there.”