08.12.2025
Private bank UBP rolls out VCC fund with S$200 million in commitments
The fund will invest in fixed-income strategies; a second fund to be launched next year will invest in a hedge fund of funds.
Navigating Fixed income in times of inflation
The high-income segment within fixed income is particularly well suited to the current times of robust GDP growth, elevated yields, and higher inflation.
"Inflation likely isn't behind us yet, and investors should be cautious if they're expecting interest rates to return to pre-Covid levels."
A new interest rate environment: why invest in fixed income now?
The US economy continues to expand at or above its potential, and rate cuts in 2024 are likely to have a positive impact on the real economy in 2025. The Federal Reserve may not have to ease policy too aggressively, and the short-term neutral rate could be higher than initially anticipated as inflation and fiscal spending continue to run high.
Meanwhile in Europe, while growth has been subdued, it remains well above recessionary thresholds, with the eurozone’s peripheral economies emerging as key drivers of growth. This trend should be further supported by a more dovish stance from the European Central Bank.
Overall, the easing bias among central banks is expected to mitigate downside risks to the growth outlook, enhancing the prospect of a soft landing.
As regards inflation, trends are unlikely to return to pre-pandemic levels, and central banks have become more tolerant of higher inflation.
Interest rates range-bound
The prospect of a soft landing and fiscal policy support remove the need for aggressive rate-cutting.
Higher inflationary backdrop
The robust growth outlook will likely prevent inflation from returning to pre-Covid levels.
Fixed income attractiveness
Higher yields provide carry opportunities and volatility buffers.
Fixed income opportunities in the new environment
With robust growth and above-target inflation, the rate-cutting cycle is expected to be limited, favouring high-income credit and carry. Such an environment supports a barbell portfolio construction, which consists of combining short-dated quality credit and higher-income asset classes.
Client benefits
The objective is to maintain a similar profile to a vanilla 5-year investment-grade corporate bond allocation while locking in higher yields. A short-dated sleeve would bring defensiveness and income. A high-income sleeve would bring superior carry but not at the expense of liquidity.
Get the white paper
Read our white paper (available only in English), ‘Global fixed income in the new inflation and interest rate regime’, to find out how UBP’s Fixed Income team see the outlook for bonds and what approach investors could consider for building their portfolios in the current environment.
Pick (at least one) of our experts’ newsletters below to download the white paper:
The views and opinions expressed by fund managers (internal or external) may differ from the house view. They are shared for informational purposes and do not constitute investment advice or a recommendation.
Meet the team
The Global Absolute Return Fixed Income team combines extensive experience with in-depth expertise across fixed income markets. Led by Philippe Gräub, the team includes seasoned experts in their fields who are dedicated to delivering superior risk-adjusted returns to investment portfolios.
Key facts and figures
- Consistent investment process since 2008 under the same lead portfolio manager.
- USD 18 billion in assets under management as at 30.09.2024.
- Twelve seasoned investment professionals.
- Four core strategies: Money Market, Defensive, Core Allocation, and High Income.
05.12.2025
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Core allocation to investment grade credit: Bridging the performance gap
The euro investment-grade (IG) credit market has historically delivered an average annual return of +2.8% since 2005. However, the past five years have proven particularly challenging, with returns stagnating at around 0.0%. This period was marked by a sharp 15% drawdown in 2022, driven by the energy crisis and surging inflation.
19.11.2025
UBP's strategic income strategy: a smarter way to invest
Tune in to our latest podcast to explore how UBP’s Strategic Income strategy is redefining fixed income investing in today’s evolving market landscape.
21.10.2025
From Headlines to Reality: The Strength of Andean nations
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23.09.2025
The financial tectonics shifts shaping bond markets that investors cannot afford to ignore
Just as tectonic plate movements can trigger earthquakes and reshape landscapes, financial tectonics shifts are being driven by three forces that are compelling investors to rethink their approach to bond markets: the fragmentation of the global economy, fiscal indiscipline, and the tsunami of passive investing.