Optimize Your Leverage

Latest edition · September 18, 2026

Optimize your leverage en 1666467

UBS outlines how investors can strategically employ borrowing to manage liquidity, enhance diversification, and boost long-term return potential despite rising global interest rates. The report emphasizes rigorous risk management, duration matching, and stress-testing liabilities against margin calls and currency appreciation.

Despite central banks adopting hawkish stances and sovereign bond yields reaching multi-year highs, UBS CIO argues that strategic borrowing remains a valuable financial planning tool. Access to credit lines can handle liquidity needs like tax bills or capital calls without liquidating assets at depressed prices. However, with expected US Fed funds rates heading toward 4.00-4.25% and ECB rates rising further, investors must ensure the expected asset returns exceed borrowing costs, avoid asset-liability duration mismatches, and establish formal repayment schedules and contingency plans.

Key takeaways from the latest edition

• 1.Proactive and prudent borrowing can mitigate tax drags, enhance returns, and preserve liquidity instead of holding cash exposed to inflation.
• 2.Low interest rates in currencies like the Swiss franc and Japanese yen carry exchange-rate risk that requires careful scenario planning and hedging.
• 3.Borrowers must follow three key principles: use debt to diversify, match liability and asset durations, and manage liabilities proactively with clear repayment plans and stress testing.

What this series covers

• US and Eurozone: rates to rise
• Swiss franc: low rates, not low risk
• Japanese yen: expectations matter
• Global asset class preferences definitions

Edition archive

• Optimize your leverage en 1666467

  September 18, 2026

• Optimize your leverage en 1661414

  June 19, 2026

• Optimize your leverage en 1660142

  May 25, 2026