How Can Income Investors Tackle Higher Inflation

UBS advises income investors to diversify portfolios across fixed income, equity dividends, and alternatives to mitigate the risks of sticky inflation caused by geopolitical supply disruptions. This strategy aims to preserve purchasing power that traditional government bonds may fail to protect.

Key Takeaways

• 1.Sticky inflation driven by Middle East oil supply disruptions poses risks to income portfolios, necessitating diversification beyond traditional government bonds.
• 2.Investors should consider a mix of diversified fixed income, dividend-focused equity strategies, and alternatives such as infrastructure and real estate to maintain real returns.

Table of Contents

• How can income investors tackle higher inflation?
• UBS House View Briefcase
• Key message
• 01 Diversified fixed income can enhance yields and spread risks.
• 02 Investors can also consider equity income approaches.
• 03 Longer-term investors may consider exposure to alternatives.
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