Stockholm (NordSIP) – On Thursday, November 10th, UBS Asset Management held its UBS ETF European Investment lunch at Grand Hotel in Stockholm, following a three-year pandemic-induced hiatus.
The presentation covered macroeconomic outlook, fixed income indices and ETF market trends and returned, again and again, to the topic of ESG investments.
SFDR Fund Disclosures
Foremost among these trends was the rising popularity of ESG Fixed income funds classified as Article 8 and Article 9 under the EU’s Sustainable Finance Disclosures Regulation (SFDR).
“Most of our investors are moving more and more towards ESG and decarbonisation investments. Non-ESG Fixed Income ETFs seem to be used more as a tactical instrument but ESG Fixed Income ETFs more as a core holding,” said Florian Cisana, Head UBS ETFs & Index Funds Strategic Markets Nordics, France & Israel at UBS AM.
Commodities Rule the Markets
Another recurrent topic was the difficult macroeconomic conditions so far this and the implications for returns across asset classes. No market performed well and only commodities appear to have provided positive returns.
MDBs Offer a Hedge
Later, in his analysis of potentially attractive fixed-income investment opportunities, Davide Guberti, ETF & Index Fund Investment Analytics, UBS Asset Management, pointed to the ability of multilateral development banks (MDBs), such as the World Bank, the EBRD, the Asian Development Bank or the African Development Bank to combine AAA ratings with exposure to returns in a range of developing markets.
Beyond their rating, Guberti also highlighted the fact that MDB exhibited defensive properties comparable to US Treasuries during the latest major equity sell-offs, which would make them appealing as alternative to US Treasuries during crises.
Given the tumultuousness of the market in the last nine months, it is encouraging to find an appealing investment opportunity aligned with sustainable goals.