UBS Thinks Junk Bonds Are Best Positioned to Withstand Geopolitical Storm

    According to Bloomberg News, high yield debt in the United States is well placed to tide over volatility caused by the ongoing Russian invasion of Ukraine, as per UBS. On a note, strategists at UBS, Matthew Mish, say that the signs of distress are limited. 

    The US junk debt outperformed

    The biggest risk is that global investors exposed to Russia/Ukraine might have to sell US credit so that adequate liquidity can be raised amidst the outflows, according to UBS. 

    Bloomberg News reports that US junk debt outperformed compared to Europe, Asia, and emerging markets, while the systemic risks are appearing to be contained, stated UBS in a note released late Wednesday. While interest coverage is at an all-time high, they have added that leverage is seen in the bottom quartile. 

    Outflows of HY have come to a halt, rising stars are bringing down the net debt, and dealer positions are above average, as the strategist wrote. 

    UBS recommends that investors invest in B-rated bonds and debt in the communication and financial sectors. They have advised being underweight consumers of non-cyclical and cyclical bonds. 

    Bloomberg News reports that UBS has said that the overall direct exposure to Ukraine and Russia is almost negligible in terms of revenue for the issuers of US high yield bonds and that of the leveraged loans, as said by UBS. 

    The strategists have also said that high-yield debt in Asia and Europe will offer better returns for investors who exercise patience by the end of the year. 


    RELATED ARTICLES

    When was Studio Ghibli founded

    When Was Studio Ghibli Founded: Japan’s Iconic Animation Legacy

    Studio Ghibli is a popular Japanese animation studio, known by many for its stunning movies,...
    US-Ukraine talks

    US-Ukraine Talks: Zelensky Seeks Meaningful Outcomes Amid War

    Ukrainian President Volodymyr Zelensky hopes the subsequent talks between Ukraine and the United States will...
    OTT platforms

    OTT Platforms: Reviving Local Languages, Culture, and Heritage in India

    OTT systems have revolutionized content material intake in India, presenting audiences with admission to numerous...
    mental health

    Mental Health Awareness In India: Breaking The Stigma In 2025

    One of the aspects of our overall well-being is mental health, and it should not...
    women safety in India

    Women Safety in India: Key policy changes and ongoing challenges

    For an extended period, Indian society has maintained women's safety as both domestic and international...
    New Education Policy 2024

    New Education Policy 2024: Learning is Being Transformed

    Education in India has long been dependent on traditional methodologies that emphasize rote learning and...
    Ftasiaeconomy Crypto Trends

    FTAsiaEconomy Crypto Trends: What’s Shaping 2025?

    The cryptocurrency space moves at breakneck speed with new advances, changes in regulation, and broader...
    gaming harmonicode

    Gaming Harmonicode: Revolutionizing Game Logic Systems

    Gaming harmonicode is about to change how we play and interact with our favorite entertainment....
    How to Make Smart Decisions With Your Home’s Value

    How to Make Smart Decisions With Your Home’s Value

    Your home is more than just where you hang your hat—it’s a big piece of...
    The Important Aspects of Website Design in NY

    The Important Aspects of Website Design in NY

    Whether you have a website is no longer key in the business landscape. The priority...
    ftasiatrading ecommerce tips

    FTAsiaTrading Ecommerce Tips for Smart Buying and Selling

    FTAsiaTrading's e-commerce website is an interesting online platform designed to make transactions smooth for businesses....