1. Investment expertise
  2. Global & absolute return fixed income
Investment expertise

Global & absolute return fixed income

Global & absolute return fixed income

UBP Global and Absolute return fixed income team is a multi-awarded team managing a range of investment solutions across the global fixed income spectrum. The team has been successfully managing and growing both benchmarked solutions (such as Investment Grade Corporate bonds) as well as absolute return strategies, which offer volatility-optimized solutions for fixed income investors. Its top-down macro identity and strong focus on liquidity has led to its innovative and awarded approach in managing high yield securities.

The Global & Absolute Return Fixed Income team offers a range of investment solutions both through mutual funds and dedicated bespoke mandates. It proposes traditional fixed income solutions covering segments such as government and investment grade corporate bonds. In addition, and readying for the lower yield environment it has been developing a range of volatility-optimised absolute return strategies with 3 different target return levels. Last, its strong top-down macroeconomic-driven investment process has led to its innovative solution for investing in high yield securities, as well as its income solution for CHF-based investors.

Investment philosophy and principles

The team’s philosophy is top-down macroeconomic driven. It rests on the observation that the key investment performance driver of any fixed income portfolio is its broad asset allocation. This belief has led to the following core investment principles:

  • Macro: The team is top-down macroeconomic-driven and asset allocation across fixed income segments is its key value added. It works with proprietary macro indicators (with 15-year track record)
  • Liquid: The team puts a strong focus on the liquidity of the instruments used, to allow for efficient implementation of its allocation decisions (i.e. investing and divesting a segment)
  • Disciplined: The team believes in investment discipline to preserve returns and optimise risk-reward. It works with tailor-made pragmatic risk modelling tools, such as hands-on stress tests and real-time performance monitoring
  • Team-based: The team fosters a culture of complementary investment professionals challenging investment hypotheses from different angles
  • In abiding to its core principles number 1 and 2, the team has a very restrictive approach to investing in high yield securities.

    Industry recognition

    UBAM - Global High Yield Solution is best in class vs. its peer group over 1 year, 3 years and since inception(1)

    UBAM - Global High Yield Solution was awarded a Lipper Awards for best fund over 3 years in 2014 and in 2015

    UBAM - Global High Yield Solution achieved a 5 Star Rating from Morningstar

    (1) Source: UBP, peer group of US and global high yield mutual funds, since 03.12.2010 and as of 29.02.2016.

Investment process

The investment process follows three key steps

1. Definition of top-down macro scenario and allocation views

Cyclical and structural economic trends, monetary policies

Politics and overarching market themes

Top-down relative value analysis (focus on segments)

Output: allocation views

2. Risk and correlation analysis of allocation views

Volatility and correlation analysis

Stress tests and drawdown scenarios

Output: concrete asset allocation adapted to the constraints and risk limits of any given portfolio

3. Bottom-up instrument selection

Fundamental bottom up credit research (focus on investment grade)

Bottom-up relative value analysis (focus on issuer and instrument)

Output: portfolio construction

Performances are monitored in real time and all steps above are reviewed on an ongoing basis ensuring swift integration of new information on any dimension, i.e. a new input on the macro, risk or bottom-up front

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Institutional clients

With a team of more than 200 people, UBP Asset Management has built an on-the-ground presence in the world’s major markets through organic growth and selected partnerships.

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