1. Newsroom
  2. Asset TV Masterclass: Fixed Income
Menu
UBP in the press 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

Le news più lette

UBP in the press 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 the press 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 the press 23.01.2020

UBP’s remontada

Sphere (01.2020) - At the end of June 2019, UBP's assets under management had almost risen back to the level they reached in 2007, before the financial crisis caused them to fall to CHF 65 billion by the end of 2010. Since then, UBP has doubled in size and laid the foundations for further growth.

Altro da leggere

UBP in the press 03.07.2020

Asset TV Masterclass: impact investing

Impact investing is not a new concept, but it has been gaining ground since the start of the COVID-19 pandemic. So what does impact investment really involve and what are the prospects for impact solutions?

UBP in the press 26.06.2020

Smug Money podcast: Healthcare investing in EM

Good With Money (19.06.2020) – UBP Head of Global Emerging Equities Mathieu Nègre joins Sustainable(ish) founder Jen Gale in a podcast to discuss healthcare investing in emerging markets.

UBP in the press 23.06.2020

What impact investing needs as it grows

Investment Week (17.06.2020) - In response to growing concern about global issues, impact investing is in increasing demand, and has become essential in the view of many shareholders.