Bonds from emerging Asian markets could provide attractive investment opportunities in an environment of elevated global bond yields, according to UBS. “We actually started to shift clearly into EM Asia because we see value” in credit and fixed income amid high yields, Adrian Zuercher, co-head of global asset allocation and co-head of global investment management APAC at UBS’s chief investment office, said on CNBC’s ” Squawk Box Asia .” A strong macroeconomic environment allows emerging market bonds, and more specifically Asian bonds in the tech sector particularly in high yield, to do really well, Zuercher said, noting that they have outperformed in the last couple of months. He also said high yield has “much better quality” compared to 10 and 15 years ago. With regards to investing in commodities, gold is still a “very good” asset for diversifying portfolios, according to Zuercher. “It’s definitely a good trading environment for gold,” he said, especially since the U.S. dollar still has weakness from a structural perspective. “And if you really want to diversify with commodities, then probably having a broad commodity exposure looks more interesting, given also the Middle East situation where oil is drifting higher,” Zuercher said. The AI boom has helped fuel strong demand for copper and other commodities as well, he added. “More broad-based commodity exposure can really help, and also sort of limit some of the downside risk if oil prices are moving higher,” he added.
