How Can Income Investors Tackle Higher Inflation

UBS recommends income investors mitigate the impacts of persistent inflation by diversifying portfolios across fixed income, equity dividends, and alternatives. The report emphasizes that traditional government bonds may fail to provide adequate real returns in the current inflationary climate.

Key Takeaways

• 1.Inflation risk necessitates portfolio diversification across bonds, equity income, and alternative investments.
• 2.Investors should combine investment grade bonds with select high yield and emerging market debt, and consider inflation-linked bonds.

Table of Contents

• 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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