1. Newsroom
  2. Frontier debt: a compelling investment opportunity
Menu
Analysen 11.03.2020

Frontier debt: a compelling investment opportunity

Frontier debt: a compelling investment opportunity

We believe frontier markets offer a compelling long-term investment opportunity: the combination of faster average growth rates, mostly manageable debt loads, and higher yields is what makes them attractive.



Historically, frontier debt has outperformed other emerging market debt sub-asset classes, as well as the US high-yield segment, due to attractive yields and relatively low default rates. Frontier debt has also proved itself to be a good diversifier in balanced portfolios.

Opportunity

The recent significant widening of high-yield sovereign spreads offers an attractive entry point into the asset class. With the Fed’s recent surprise rate cut – and as we are now well into the cutting cycle – value is slowly being eroded from fixed-income assets around the world. One of the few places left where investors can generate reasonably attractive yields is in frontier markets. Despite recent events pointing to a temporary slowdown in growth, we do not expect to see a significant impact on the broader solvency metrics for the overall asset class; rather, we expect the mean reverting nature of credit to hold true, making today’s spread levels look very attractive.

Investment philosophy and process

UBP’s Emerging Market Debt team has a long history in credit research and security selection. The investment process for the frontier strategies will focus on bottom-up selection, aiming to generate attractive carry throughout the investment cycle, while managing the risks associated with those countries in potential distress.

Our expertise

Thomas_Christiansen_150x150.jpg
Thomas Christiansen
Portfolio Manager
EM Fixed Income

Expertise

Swiss & Global Equities

Why Swiss equities now? This market offers equity investors the stability and agility they need to navigate this volatile period. 

Read more
Expertise

European Equities

European equities offer unrivalled opportunities in terms of breadth of sector and market exposure.

Read more

Meistgelesene News

Analysen 01.10.2020

COVID-19: Die UBP hält Sie auf dem Laufenden

Seit dem Ausbruch des Coronavirus begleiten und unterstützen wir unsere Kunden während dieser ungewöhnlichen Zeit einer weltweiten Gesundheitskrise. Die Bank informiert Sie regelmässig über die Anpassungen ihrer Massnahmen an die von den Gesundheitsbehörden vorgegebenen Vorsichtsregeln. Ausserdem kommen unsere Experten zu Wort, welche auf die Auswirkungen der Pandemie auf die Weltwirtschaft und die Finanzmärkte eingehen.

Analysen 30.06.2020

Aktualisierter Ausblick 2020

Weltwirtschaft - quo vadis?

Analysen 24.06.2020

Market turmoil brings new opportunities for pragmatic investors

March 2020 was difficult time for many investors, as COVID-19 spread across Europe and the US, leading to sharp sell-offs in fixed-income credit markets. While such market turbulence is not to be welcomed, its occurrence can create opportunities.


Auch lesenswert

Analysen 26.11.2020

Europäische Small Caps - aufstrebende Börsenstars

Kleinere Firmen bieten spannende Wachstumschancen

Analysen 24.11.2020

Perlen im SMID-Cap-Segment in Europa und der Schweiz

Unternehmen kleiner und mittlerer Kapitalisierung verzeichnen oftmals höhere Wachstumsraten und Renditen als Grosskonzerne. Es ist einfacher, ein kräftiges Wachstum von einer kleineren Basis aus zu generieren. Die sogenannten SMID Caps bieten Anlegern eine Positionierung in langfristigen Wachstumstrends.

Analysen 21.11.2020

UBP Investment Outlook 2021

Schöne neue Welt