1. Newsroom
  2. Asset TV Masterclass: Fixed Income
Menu
UBP in der Presse 13.09.2018

Asset TV Masterclass: Fixed Income

Asset TV Masterclass: Fixed Income

Considering the rising-rate environment we find ourselves in, what sort of role does fixed income play in a portfolio, and what can be done to protect investors from declining liquidity? Mohammed Kazmi, Portfolio Manager & Macro-Strategist Global and Absolute Return Fixed Income at UBP, recently participated in an Asset TV Masterclass, a broadcast outlining the current challenges and opportunities in the biggest asset classes.


 

Fixed income, and risk markets more generally, are no longer receiving the support they once did from central banks, as the period of extreme monetary accommodation via quantitative easing comes to an end, with investors having to now deal with a new regime of tighter monetary policy.

This reduction in liquidity leads to higher volatility, note Mohammed Kazmi and other industry experts during the Masterclass. According to UBP’s Portfolio Manager, investing in fixed income is no longer about buying across the board and chasing yield alone. The changing environment requires much more selectivity in order to pick the winners. It also requires an increasing use of more liquid instruments, to be able to react and navigate through the more volatile market. Such developments make the case for active managers.

This is especially true as the withdrawal of liquidity is coming at a time when markets are haveing to contend with various unresolved issues including the US–China trade row, budget talks in Italy, and the sell-off in emerging markets.

Nevertheless there are pockets of value, states Mohammed Kazmi, such as the return potential in US high yield. Investors shouldn’t focus excessively on the negatives, he adds. Federal Reserve rate hikes in the near future shouldn’t be too detrimental for the market as they have already largely been priced in. So despite some uncertainties, the macro outlook remains positive with inflation being kept well under control, while global growth is still relatively robust.

On the other hand, although valuations have become more attractive, emerging markets remain under pressure. Having seen significant inflows in the past few years, they are now going through what Mohammed Kazmi defines as a “cleansing phase” as some of the “tourist” money, driven by the quantitative easing environment, is still leaving these markets. Until credible policies are put in place by central banks and governments in some of these emerging countries, a cautious and selective approach is necessary.

Global & absolute return fixed income

Kazmi-Mohammed-150x150px.jpg

Mohammed Kazmi
Portfolio Manager & Macro-Strategist

Expertise

Impact investing - Contributing to a more sustainable future

What are the key features of impact investing?

Read more

Meistgelesene News

UBP in der Presse 13.02.2020

Are all batteries created equal?

Environmental finance (02.2020) - Electric vehicles (EVs) have an important contribution to make towards a zero-carbon future and therefore are suitable for inclusion in a positive impact investment strategy.

UBP in der Presse 17.04.2020

Smug Money podcast: Is impact investing the answer?

Good With Money (25.03.2020) – Our Co-Manager of the Positive Impact Equity strategy Rupert Welchman discusses the importance of impact investing in the current environment.

UBP in der Presse 03.03.2020

Diskretionäres Portfolio-management kombiniert Know-how und Flexibilität

Le Temps (02.03.2020) - Es ist mittlerweile eine Selbstverständlichkeit, dass sich die institutionelle Verwaltung und das diskretionäre Portfoliomanagement gemeinsamer Entscheidungshilfen und Verwaltungsmethoden bedienen.

Auch lesenswert

UBP in der Presse 06.08.2020

A pure-play private bank with a long heritage - the UBP way

WealthBriefingAsia (03.08.2020) - Ranjit Khanna, Head of South Asia and Singapore Branch Chief Executive, Union Bancaire Privée, talks to WealthBriefingAsia. The bank won Best Boutique Private Bank (Southeast Asia).

UBP in der Presse 03.08.2020

The dawn of the hedge fund era

Le Temps (03.08.2020) - In the past ten years, hedge funds have struggled to offer any kind of satisfactory returns, constrained by persistently weak interest rates and a lack of volatility.

UBP in der Presse 24.07.2020

The Covid-19 shock: has your family office proven to be resilient?

Arabian Business (12.07.2020) - As we slowly come to terms with the initial effects of the Covid-19 crisis, it is time to see what wealthy families and single-family offices in the Middle East can learn from it.