Five safe haven investments if the global economy goes into meltdown (and one under the radar fund to buy RIGHT NOW): As more and more experts warn of a devastating fall in …
Barely a day goes by without another financial expert or major institution warning of a stock market downturn on the horizon.
Bank of England Governor Andrew Bailey warned this month that the risk was growing of a ‘sharp correction’ to stock markets, the International
Monetary Fund said odds were rising of a ‘disorderly’ global correction, and the boss of JP Morgan, Jamie Dimon, said that he was ‘far more worried than others’.
Reasons for concern include the soaring value of artificial intelligence (AI) stocks – which some fear could be in bubble territory – spiralling government debt across the globe, and ongoing political tensions.
Investors wishing to protect themselves against what lies ahead face a challenge.
First, trying to time the stock market is a fool’s errand, and it is virtually impossible to know when the next crash will come.
Those who take dramatic steps, such as selling out, could come to regret it if stock markets continue to rise.
Furthermore, if there is a crash it is hard to pre-empt how it would play out and which investments would be most affected.
Monetary Fund said odds were rising of a ‘disorderly’ global correction, and the boss of JP Morgan, Jamie Dimon, said that he was ‘far more worried than others’
However, there are some investments that experts believe are likely to fare less badly if there is a major market correction. Some could provide a safe haven for worried investors to stash their wealth in – and even offer some growth in the meantime.
However, it is worth remembering that no asset type is guaranteed to be safe and no one can predict the future.
So one of the best insurance policies is spreading your money across different geographies, sectors and asset types, such as bonds, equities and property.
That way, you are not overly exposed to one area of the stock market if it suffers a large drop. It is unlikely that all of your holdings will fall dramatically at once, so you should be protected from the worst of it.
‘Finding a true safe haven is extremely difficult. When markets panic and liquidity dries up, people will sell anything – even assets traditionally seen as safe,’ says Darius McDermott, managing director at investment firm FundCalibre. ‘Therefore, the best defence against a market retreat is genuine diversification across investment styles, themes and geographies.’
Here are five ideas that could help to protect your portfolio in a market meltdown.
1. Government bonds
US government bonds, known as Treasuries, are generally considered to be the ultimate safe haven, and are usually where investors flock in times of uncertainty.
That is because they are debt issued by the US Government and things would have to go very badly wrong for it to default and not pay back its lenders.
There may be some doubts over the state of Britain’s finances, but the Government has never yet defaulted on its debts, says James Harries, manager of the Troy Trojan fund
The bonds currently pay an attractive 4.25 per cent a year yield (or interest) over ten years. However, some investors are concerned that they are not as safe under Donald Trump’s administration as they used to be.
David Coombs, head of multi-asset investments at investment firm Rathbones, believes that Treasuries deserve to keep their safe haven status, but he is also diversifying into other government bonds.
The appeal of these investments is that they pay a reliable income and, if they are issued by a financially robust government, are unlikely to fail.
‘Given that we have a US President who tends to tweet on a Sunday night and cause all sorts of kerfuffles, we have been looking around the world to other safe haven countries and currencies,’ Coombs says.
He owns bonds issued by the governments of Norway and Portugal, both of which he views as robust and unlikely to default on any debt. Switzerland and Singapore are other potential bond safe havens, but Coombs is not currently investing in these.
And don’t forget UK Government bonds (or gilts), says James Harries, manager of the Troy Trojan fund. There may be some doubts over the state of Britain’s finances, but the Government has never yet defaulted on its debts.
An added attraction for investors who hold gilts directly is that any capital gains are tax-free. Ten-year gilts are currently paying a yield of 4.54 per cent.
These assets can be accessed through specific government bond funds or strategic bond funds.
The latter have the flexibility to invest in bonds issued by both companies and countries, according to where the manager spies the best opportunities.
The TwentyFour Dynamic Bond fund, for example, has about 20 per cent of its portfolio in government bonds, including those issued by the US and Germany. It is up 17 per cent over five years and currently yields 5.11 per cent a year.
Eren Osman, from Arbuthnot Latham, suggests the Vanguard UK Gilt exchange-traded fund (ETF) as a low-cost option which tracks an index of gilts. The fund, which charges just 0.05 per cent annually, currently yields about 4.5 per cent a year. However, because the prices at which bonds trade rises and falls, it is down in value 30 per cent over five years, although it has risen 1.9 per cent over the past year.
2. All-weather firms
There are some products that people buy all the time.
One option is to identify the companies that make these products, as they are likely to prove resilient even in an economic downturn.
Job Curtis, manager of the City of London investment trust, favours this approach.
It’s not just enough to identify all-weather companies. Job also looks for those with strong balance sheets that do not have too much debt, so they can weather a storm
In a downturn, he says: ‘Companies that are dependent on discretionary spending will suffer as people cut back, but we will all continue to go to the supermarket and buy everyday goods.’
It’s not just enough to identify all-weather companies. Job also looks for those with strong balance sheets that do not have too much debt, so they can weather a storm.
He also likes those that pay a reliable dividend because, in market slumps when share price growth is harder to come by, an income becomes even more attractive.
He likes Tesco, which is competitively priced and the biggest supermarket in the UK, with more than 28 per cent market share.
‘The Clubcard gives it a big advantage,’ he says. ‘Tesco knows its customers better than any other supermarket.’
Unilever, the company behind brands such as Dove, Domestos, Cif and Vaseline, is another favourite. It makes products that consumers continue to need regardless of the economic environment, and owns a stable of brands that customers tend to be loyal to.
Harries agrees that looking for companies that produce a reliable income is a good approach.
He suggests the soft drinks company Pepsi, the healthcare group Coloplast, the food distribution firm Sysco and Guinness brewer Diageo.
‘These are robust, solid businesses with identifiable, sustainable competitive advantages,’ he says. ‘They generate lots of cash, have sound management teams and do not have too much debt.’
3. Gold
Gold has had an incredible run in 2025, and is up 54 per cent so far this year, prompting some to ask whether it is in bubble territory.
But the precious metal still deserves a place in most investment portfolios, says Harries.
Gold has historically been viewed as an insurance policy for investors as it tends to rise in price during times of uncertainty.
For example, it gained about 25 per cent during the 2008 financial crisis and more than 30 per cent between 2018 and 2020 when markets wobbled.
Gold has had an incredible run in 2025, and is up 54 per cent so far this year, prompting some to ask whether it is in bubble territory
The main appeal of gold is as a physical store of value, which people flock to during difficult market conditions. However, it does have downsides – its price is largely driven by sentiment, which means it can be volatile, and it pays no income, so is less attractive when interest rates are high and investors can earn money on cash in the bank.
‘But gold gives you a lot of protection, and you could still argue it has some catching up to do compared with other assets,’ says Harries.
The easiest way to invest is through an exchange-traded commodity (ETC), a low-cost fund that simply tracks the price of the metal. For example, the iShares Physical Gold ETC is up 108 per cent over five years and charges 0.12 per cent annually.
It is also possible to buy physical gold. Bullion from The Royal Mint starts at about £125 for the smallest 1g bar. But many UK investors prefer to invest in coins because they are exempt from capital gains tax due to their status as legal British currency.
There are plenty of other gold dealers, and most will store and insure it for you at a cost.
Physical gold is not regulated by the Financial Conduct Authority. That means the protections offered by the Financial Ombudsman Service and Financial Services Compensation Scheme are not applicable, so tread carefully before buying and check reviews on websites such as Trustpilot.
If you’re keeping gold at home, make sure you tell your home contents insurer and buy a safe.
4. Multi-asset funds
In uncertain times, investors who don’t feel confident shifting their own portfolio can enlist an expert to do it for them.
Multi-asset funds have the flexibility to invest in a range of investments, including equities, bonds and alternatives such as gold, property and infrastructure, depending on where the manager thinks the opportunities and risks lie.
‘These flexible, all-weather strategies can be powerful anchors in volatile markets,’ says McDermott.
He likes the Orbis Global Balanced fund, which aims to balance capital growth with protecting against losses.
Top holdings include a gold ETC, Icelandic government bonds and shares in the electronics giant Samsung and chipmaker Taiwan Semiconductor. It is up 112 per cent over five years.
He also rates the Aegon Diversified Monthly Income fund, which aims to provide a reliable dividend income as well as delivering capital growth.
Its top holdings include UK Government bonds and US Treasuries, shares in software giant Microsoft and mining firm Rio Tinto, and Greencoat UK Wind, the renewable energy investment company.
It is up 37 per cent over five years, and currently yields almost 5.5 per cent.
5. Cash
If protecting your money from any loss is the priority then cash is worth considering, says Coombs.
Remember that inflation is running at 3.8 per cent, so unless your savings account beats that you’re losing value in real terms
‘Cash is not to be sniffed at. It’s not a strategic investment – you’re not there for the long term – but it’s a safe haven while the world melts down,’ he says.
You can get up to 4.51 per cent from an easy-access cash Isa. This top rate is currently paid by Trading 212, while Plum pays 4.45 per cent and Moneybox 4.38 per cent.
Watch out for accounts with short-term bonuses, and either remember to switch when your rate falls or pick an account with a consistently good rate instead.
Remember that inflation is running at 3.8 per cent, so unless your savings account beats that you’re losing value in real terms.
Investors could also consider a Money Market fund as a place to park their cash. These hold cash and cash-like investments such as bonds that will mature soon. These are low risk and should provide protection in a downturn.
For example, the Royal London Short Term Money Market fund is up 16 per cent over five years, and has an annual charge of just 0.1 per cent.
A further advantage of keeping some of your money in cash is that it is ready to deploy when a new investment opportunity arises.
‘Keeping some powder dry can be tactically advantageous, allowing flexibility for timely investments during market downturns,’ says McDermott.
…And one to buy today
There are still opportunities that should deliver regardless of what is on the horizon and should be
relatively unaffected by the global economy. McDermott suggests the Regnan Sustainable Water And Waste fund as one option.
It invests in companies set to benefit from long-term trends, including urbanisation, growing global wealth and improving infrastructure in developing markets, all of which drive the need for water supply and better management of waste.
Its top holdings include the Brazilian waste management firm Sabesp, the British water supply firm Watts Water Technologies, and the American water tech firm Xylem. Some 60 per cent of the portfolio is in US stocks, with other investments in Japan, Europe and Asia.
McDermott says: ‘These companies operate largely at a local level, making them much less exposed to tariffs or geopolitical disruption.’ The fund, which was launched in 2021, has returned 35.7 per cent over five years.