UBS released a statement confirming that the caliber of bonds matters. Took them this long. The higher rates go, the more it matters, they add. Revolutionary stuff from a bank that charges you to tell you things that are definitionally true.
Higher rates create winners and losers. This is what happens when numbers go up. Some things benefit. Other things don't. UBS saw this coming and decided to monetize the observation by telling clients where the opportunity is. The opportunity is in the good bonds, not the bad bonds. You're welcome.
Retail traders already bought the bad bonds six months ago because a guy on Twitter with a laser-eyed profile picture said yields were free money. They're now sitting on a 14% loss wondering why their "safe" fixed-income allocation is behaving like a penny stock. The caliber didn't matter then. It matters now. UBS would like to help, for a fee.
The bank sees opportunity. They always see opportunity. That's the job. If they came out and said "we see no opportunity, everything looks terrible, maybe just hold cash," they'd stop existing as a business. So they see opportunity in bonds. Specifically the ones that won't implode when rates continue doing what rates do.
This is technical analysis masquerading as credit analysis. The chart says rates go up. UBS says buy the bonds that don't die when rates go up. Groundbreaking work. Someone get these guys a mandate to manage more money.
The real joke is that by the time you read where UBS sees opportunity, they've already positioned their book and moved on to the next trade. You're not getting the opportunity. You're getting the press release about the opportunity they already took.
But sure, chase those high-caliber bonds now that someone told you they matter.
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