Zero or Negative interest rate charge – what to do?

The situation gets tricky, more and more banks stop subsidizing and charge their clients for holding cash on the account.

Thresholds get reduced, new client segments such as private clients get confronted with the charge. And reading between the lines, further interest rate steps by SNB can not be excluded anymore.

There are solutions to soften the issue, and this without extending the rist pattern substantially.

Many investors have increased their cash portion due to lack of confidence towards many market levels and due to historic low yields on Bonds, many High grade segment even yielding negatively.

The Fixed Income markets have seen a major change since 2008. It needs new and adopted strategies to generate a mostly positive contribution.
Real specialists do have the skills and the time to monitor the markets actively, act and optimise timely if needed.

What to do?

Get in touch with us and listen to our solutions, maybe it fits for you too.
We worked out a solution which has to fulfill the following needs and requests:

  • broadly diversified portfolio with good quality level
  • no currency risks and the least possible interest rate change risk
  • daily liquidity
  • small denominations (to enable smaller clients to participate too)
  • aim to provide mostly positive returns

Solution with many advantages

The above mentioned needs all are taken care, which makes this cash-alternative already better than cash. On top, we

  • can provide a AAA counterparty risk
  • don’t allow leverage in the product
  • offer competitively (no stamp duty, low management fees)
  • monitor the solution and the underlying elements actively and react if needed
  • help you smoothen the threat of negative interest rate charges
  • achieve a professional result by enaging with proven specialists
  • help increasing efficiency of buyers/investors/advisers as it is time consuming and challenging to stay always on top of the market moves

Wealth preservation or retaining purchase power mostly is the expectation towards a Fixed Income portfolio. And this is what our solution is aiming for too. It is a conservatively managed strategy, working with volatilities which are lower than the comparisons. This solution of course is exposed to market movements and interest rated moves as other solutions, however we aim to immunise the impact by choosing complementary strategies.

Driving and managing a Fixed Income portfolio well has become more challenging due to low interest rates, higher volatility and lower liquidity. Hence to engage with proven specialists and insource their skills to manage market liquidity and the risks pays off.

Contact us by phone or mail. We look forward to be in touch with you.

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Convestro AG

Schipfe 2
CH-8001 Zurich

T: +41 43 888 45 45
E: info@convestro.com

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