How Can Income Investors Tackle Higher Inflation

Latest edition · June 15, 2026

How can income investors tackle higher inflation en 1661469

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.

The report highlights that inflation has accelerated due to Middle Eastern supply disruptions, creating a challenge for income-focused portfolios. UBS analysts advise against relying solely on traditional high-quality government bonds, suggesting instead a blend of investment-grade and selective high-yield bonds, equity income strategies in markets like Switzerland and Southeast Asia, and inflation-linked assets. Additionally, the report outlines the potential for private assets like infrastructure to provide inflation-linked cash flows, while acknowledging the inherent risks of illiquidity and volatility in these sectors.

Key takeaways from the latest edition

• 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.

What this series covers

• 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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Edition archive

• How can income investors tackle higher inflation en 1661469

  June 15, 2026

• How can income investors tackle higher inflation en 1660816

  June 1, 2026

• How can income investors tackle higher inflation en 1660016

  May 19, 2026