People in Switzerland hold almost one third of their assets as cash in accounts. Yet more and more banks are reporting negative interest rates. As a result, 30 percent of these assets will gradually shrink. Are there still any financial investments that avoid loss of asset value? Here we show a few suitable alternatives to cash accounts.
Swiss interest rates have moved in only one direction over the past decade: downwards. There seems to be no end in sight for this period of low interest rates. Investors who keep their cash in bank accounts must be prepared for dwindling assets. Or maybe not.
Bond funds and structured products enable investors to participate in a range of markets and to hedge against certain risks. Their form depends on the particular investor’s risk tolerance and the level of potential yield.
In the section below, we present three investment ideas as alternatives to cash accounts:
Bond funds with short durations
Bonds with a short term to maturity may ensure that assets grow steadily. Nevertheless, investors have to take on greater risk than with cash accounts. Our investment-grade bonds are mainly held by institutional investors; as a result, they tend to have higher liquidity and lower volatility than lower-rated bonds.
Customized structured products
Structured products can offer an attractive investment opportunity to investors who prefer to exercise caution. These specifically include the conservatively structured barrier reverse convertibles (BRCs).
If you are looking for a customized solution, you can create structured products on deritrade. You have a choice of issuers. The product can be structured to meet individual needs.
Your contact
Michael Haupt
Director
Structured Solutions & Investments Specialist
+41 58 283 74 94
michael.haupt@vontobel.com
