The UBS Global Dynamic Bond Fund invests flexibly in a wide range of bond markets worldwide. This includes the option to exploit the opportunities offered by global interest rates, investment-grade and high-yield companies, securitized assets, emerging market bonds and currencies. It can also open individual short positions. Overall, however, the fund maintains a positive portfolio duration and a net market risk for bonds. This turns the fund into an all-rounder and a possible comprehensive solution for bond investments. With its defensive strategy and broad diversification, it can be recommended as the core of a bond portfolio, even in difficult market situations.
How can a bond portfolio be protected against rising interest rates?
The global economy is continuing to grow, albeit at a slower pace. At the same time, interest rates in most currency zones have hardly any downside potential. The cycle is even more advanced in the US, where base rates have already been raised eight times since December 2015. The question for investors: How can I protect my bond portfolio against price losses when interest rates are slowly rising?
The UBS Floating Rate Income Fund invests primarily in floating high-yield bonds where the interest payments or coupons are based on a variable benchmark interest rate. In this way it adapts to rising interest rates. The prices for floating bonds are therefore ultimately less sensitive to interest rates. Because of the spread, high-yield investments offer an additional return component. Liquidity and credit risks are actively managed by an experienced team.