Lock-in Attractive Yields

UBS advises capturing attractive yields in short-to-medium-tenor corporate bonds, favoring 2-8 year maturities. While carry is appealing, they emphasize selectivity due to tight credit spreads.

Key Takeaways

• 1.Short-to-medium-tenor bonds (2-8 years) offer superior total returns in the current environment.
• 2.Corporate bond carry remains attractive, but selectivity is essential as spreads are at cyclical lows.

Table of Contents

• Lock-in attractive yields
• Central bank pricing has eased and should come down further
• Corporate bonds: Appealing carry
• Yields are juicy...spreads not so much
• Sovereign debt affordability strained by higher yields

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