(Reuters) UBS Global Wealth Management is recommending clients holding negative-yield emerging market debt to sell their exposure as a dovish shift in central banks’ monetary policy pushes the yield on more bonds into negative territory.
Forty of the more than 3,000 emerging market bonds covered by UBS’s wealth management arm have now zero or negative yields, said Jerome Audran, emerging markets analyst at UBS Global Wealth Management. The negative yielding bonds are denominated in euros and Swiss francs.
“The outstanding amount of negative yielding bonds is increasing due to the dovish shift in global central banks’ monetary policies,” he said in emailed comments to Reuters.
(Reuters) - UBS Global Wealth Management is recommending clients holding negative-yield emerging market debt to sell their exposure as a dovish shift in central banks’ monetary policy pushes the yield on more bonds into negative territory.
Forty of the more than 3,000 emerging market bonds covered by UBS’s wealth management arm have now zero or negative yields, said Jerome Audran, emerging markets analyst at UBS Global Wealth Management. The negative yielding bonds are denominated in euros and Swiss francs.
“The outstanding amount of negative yielding bonds is increasing due to the dovish shift in global central banks’ monetary policies,” he said in emailed comments to Reuters.
UBS Global Wealth Management maintained its moderate overweight on high-yield credit in its emerging markets portfolio, said Audran, adding those bonds were expected to outperform investment grade peers in the near term.
“While the global fixed income market is artificially boosted by very accommodative global liquidity conditions we think this should remain a positive credit catalyst for EM USD [U.S. dollar] bonds in the near term,” he added.
