UBS CIO Recommends Buying Quality Bonds as 30-Year Yields Reach Multi-Year Highs
UBS CIO Mark Haefele says short- and medium-dated high-quality bonds now offer an appealing risk-return profile after 30-year government bond yields climbed to 28-year highs in the UK, 15-year highs in Germany and above 5.1% in the US. He also recommends diversified equity exposure across sectors and regions.
1. UBS Investment Outlook
UBS chief investment officer Mark Haefele highlighted an attractive risk-return profile for short- and medium-dated high-quality bonds, given current yields. He also advised maintaining diversified exposure to equities across sectors and regions to capitalize on ongoing market rallies.
2. Bond Yield Advances
Global 30-year government bond yields surged to multi-year highs—UK yields reached 28-year peaks, German yields hit 15-year highs and US 30-year Treasury yields topped 5.1%—driven by elevated inflation concerns following the Strait of Hormuz closure.
3. Inflation Risks and Investor Demand
Markets are pricing in extended high interest rates and potential Federal Reserve rate increases, yet foreign investors continue buying long-dated debt at recent Treasury auctions. UBS expects shorter-dated yields to anchor markets and manageable fiscal conditions in major economies to stabilise issuance.