Three asset classes to protect portfolios against negative interest rates

BoE move to below-zero rates not likely until next year

Overseas shares have the potential to generate higher returns than cash in a scenario in which the Bank of England (BoE) decided to take interest rates below zero, as this would likely result in a fall in the value of sterling, according to Willis Owen's Adrian Lowcock.

While he added that any such move by the central bank was not likely until next year, the head of personal investing said that "the main risk for savers is that, if rates do go negative, the return on cash - already paltry - could also turn negative". He said overseas companies were one of three alternative options to holding cash on the basis that negative interest rates in the UK are "likely to impact the value of sterling in international markets, causing it to drop". Robeco: Protracted negative rates to lead to 'brave new world' "Exposure to overseas equities will diversify you...