Investment Advisors Urge High-Net-Worth Clients to Buy Bonds
Investment advisors from UBS and J.P. Morgan are encouraging wealthy clients to enter the bond market following a sharp selloff that pushed Treasury yields to 20-year highs.
Investment advisors to high-net-worth individuals are urging clients to return to bonds after a sharp selloff pushed Treasury yields to their highest levels in over two decades. On Wednesday, the 10-year Treasury yield reached 5.365% and the 30-year yield hit 5.732%.
Jason Katz of UBS Wealth Management and Kriti Gupta of J.P. Morgan Private Bank describe the current environment as a compelling entry point. They note that tax-exempt municipal bonds now offer tax-equivalent yields approaching average stock market returns without the associated equity risk. While some investors remain reluctant, advisors suggest using the volatility to create portfolio ballast and income.
Recommended strategies include harvesting tax losses and maintaining exposure across the maturity curve. However, Mike Silverman of Cresset emphasizes prioritizing high credit quality, specifically AA-rated municipal bonds, to ensure clients are not forced to sell during market volatility, which he warns is how wealth is destroyed.
