Will Higher Yields Derail Bond Investing

UBS argues that the recent spike in government bond yields is an overreaction to geopolitical and inflationary risks, creating a prime opportunity to lock in yields, especially in the 5-year segment.

Key Takeaways

• 1.The recent sell-off in government bonds is likely overdone, presenting an opportunity for investors to lock in elevated yields.
• 2.Markets are currently pricing in too many rate hikes, failing to account for how sustained high oil prices could weigh on economic growth.
• 3.UBS favors intermediate tenors, particularly around the five-year maturity mark, as they offer attractive income and protection against growth slowdowns.

Table of Contents

• Government bond yields have risen on inflation, rate, and debt fears.
• But we think investors are expecting too many rate hikes.
• So, we like locking in yields across multiple scenarios.
• New this week
• One liner
• Did you know?
• Investment view
• Non-Traditional Assets
• Disclaimer

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