It really looks like the investment industry is trying to get investors to participate in this “great rotation” from bonds to equities.According to Charlie Gasparino (via Josh Brown) some clients of UBS are about to get a shocking letter in the mail.
UBS is planning a mass mailing to many of its brokerage clients alerting them that they have been reclassified as “aggressive” investors following a recent change in its market outlook that some people inside the firm say reflects growing bearishness in the bond market, particularly over the long term, the FOX Business Network has learned.
The report goes onto note that the letter is controversial inside the firm.
Some view it as an attempt to pre-emptively avoid legal issues if investors sustain a large loss in the bond part of their portfolio in the future.
Others worry that the move will be jarring, and prompt a general client exodus.
And problem with all of this is that “bonds” can mean a variety of assets, from ultra-safe Treasuries, to very safe blue-chip bonds (which hardly yield more than Treasuries) to junk bonds, which trade more like equities, and which have gone on a gigantic run.
Again, so much talk about the great rotation and so forth. A story like this might make you wonder if it’s going too far, and if it’s all a bit forced.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.