economy
January 15, 2026
Why a diversified approach to income is ‘essential’ right now, according to UBS
The investment bank lays out what investors should consider in the way of income this year.
TL;DR
- UBS anticipates higher market volatility in the coming year compared to 2025.
- Diversification is essential for yield generation due to tight credit spreads and government debt uncertainty.
- Investors should consider exposure to fixed-income sectors with both high and low correlations to the equity market.
- Opportunities exist in investment-grade corporates, securitized products, dividend stocks, private credit, and yield-generating structured investments.
- UBS favors high-quality bonds and selective opportunities in high yield as spreads widen.
- The 10-year Treasury yield is expected to be range-bound with outlier moments.
- Medium-duration quality bonds are projected to deliver mid-single-digit returns in 2026.
- In private credit, UBS suggests focusing on sponsor-backed and senior loans for larger, less economically sensitive companies with lower debt.
- Structured investments like equity-linked notes can boost income, but require careful attention to risks.
Continue reading the original article