UBS On-Air: Market Moves
Fixed Income Roundtable with the UBS Chief Investment Office
Mar 26, 2024
Join the CIO fixed income team for insights on market expectations, preferred securities' performance, potential market pullback, investment grade bonds challenges, and outlook on preferred and equity funds amidst interest rate changes.
29:20
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Quick takeaways
- Preferred assets in the fixed income sector have shown resilience despite rising yields, driven by expectations of Fed rate cuts.
- High yield performance has been strong, attributed to positive economic indicators, healthy earnings, and increased new issuances.
Deep dives
Performance of Preferred Assets in the First Quarter
Preferred assets have shown remarkable resilience in the first quarter, with yields on the five and ten-year treasuries increasing by about 40 basis points, typically representing a headwind for preferred assets. Despite this, the preferred sector has seen positive returns, driven by the expectation of Fed rate cuts. The performance of the embedded credit assets, particularly the $25 par preferred, has been strong, showing gains of almost six percent, while the $1,000 par preferred assets have also shown positive returns. This performance has been influenced by the anticipation of Fed rate cuts.
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