1. Newsroom
  2. Asset TV Fund Selector: Fixed Income
Menu
UBP in the press 26.09.2018

Asset TV Fund Selector: Fixed Income

Asset TV Fund Selector: Fixed Income

What does the end of quantitative easing mean for bond investors? What should be the right exposure to emerging bond markets and why are active managers better equipped than passive ones to handle the return of volatility? Mohammed Kazmi, Portfolio Manager & Macro-Strategist Global and Absolute Return Fixed Income at UBP, recently participated in an Asset TV broadcast outlining the risk and reward trade-offs in fixed-income markets over the next six to twelve months.


 

With the period of extremely accommodative monetary policies – implemented through quantitative easing – coming to an end, fixed-income markets have found themselves under stress in recent months. Portfolio construction is getting more and more important in the higher-volatility regime that is beginning to take hold of the financial markets, states Mohammed Kazmi, along with other industry experts during a recent Asset TV broadcast on fixed-income funds selection.

According to UBP’s Portfolio Manager, it is not because they need to fight inflation that central banks are progressively removing liquidity, but rather because they feel comfortable with growth prospects.

With the macro outlook remaining positive and certain valuations becoming attractive after recent sell-offs, the actual tightening of monetary policies does not have to be seen as being broadly bad for financial markets, and risk markets in particular. Although investors tend to focus on interest rates hikes and rising volatility, there are actually a lot of opportunities, asserts Kazmi.

In this changing environment, where dispersion and volatility are on the rise, picking winners demands a much more active security selection. Finding pockets of value also requires an increasing use of liquid instruments for investors to be able to navigate through the more volatile markets and allow them to get more defensive or more aggressive depending on their assessment of market conditions.

As far as emerging bonds are concerned, notes Mohammed Kazmi, they are now going through a “test phase”, as some of the flows driven by quantitative easing are still leaving these markets. In contrast to previous crisis, emerging markets seem so far to be immune to the risk of contagion thanks to improved fundamentals. Nevertheless a cautious and selective approach remains necessary in the short to medium term.

Global & absolute return fixed income

Kazmi-Mohammed-150x150px.jpg

Mohammed Kazmi
Portfolio Manager & Macro-Strategist

Newsletter

Sign up to receive UBP’s latest news & investment insights directly in your inbox

Click and enter your email address to subscribe

Most read

UBP in the press 18.10.2018

Tech sector driven by innovation

Sphere (10.2018) - Since the 2008-09 global financial crisis, the global technology sector has delivered an impressive annual return of 15.4%, easily outpacing global equities as a whole (10.2%).

UBP in the press 28.09.2018

AI will benefit Swiss banks

Bilan (25.09.2018) - “If I had to bet on which would be the leading professions in the years to come, Swiss bankers would be on the list!” This prediction by Laurent Alexandre, the founder of the Doctissimo.fr website, may come as a surprise to some.

UBP in the press 05.11.2018

Commodities outlook in a volatile market environment

Agefi Indices (23.10.2018) - With the exception of oil, the commodity complex as a whole has been struggling since the beginning of the year on concerns about the escalation of the US–China trade war and a stronger US dollar.


Further reading

UBP in the press 12.12.2018

Innovation creates opportunities in healthcare

Bilan (12.12.2018) - The secular trends in healthcare – ageing populations, emerging market demand, and expanding basic health insurance – remain well entrenched.

UBP in the press 03.12.2018

It’s all in the family for Union Bancaire Privée's de Picciotto

The Straits Times (25.11.2018) - As times change, CEO’s ambition is to make UBP one of the biggest family-owned banks.

UBP in the press 27.11.2018

A new era begins for investing wealth

Forbes Middle East (22.11.2018) - Tougher regulations, tax declarations and transparency trends are significantly reshaping the private banking industry, and the Middle East is no exception to this.