Guy, could you tell us about Spring Investments and what your clients’ main challenges are today?

Guy: “Spring Investments is a FINMA-licensed investment manager specializing in fixed income strategies, especially financial subordinated debt. The company is the investment manager of Spring Subordinated Debt Fund. Our clients’ concerns range from rising inflation, which erodes their money’s purchasing power, to fears over geopolitical risks. Political and economic instability lead to increased volatility in government and corporate bond markets, which is extremely difficult for anyone unused to navigating rates, credit and liquidity risks through a cycle. In such times, it’s absolutely key to have a strong feel for market beta, be close to broker trading desks and have experience of previous volatile cycles.”

Are any emerging trends bringing opportunities?

Guy: “Yes, one notable trend is that the growth of fixed income ETFs is compressing spreads for the largest debt issuers. We believe this creates a significant opportunity, allowing experienced, specialized active managers to outperform debt ETFs. We’ve observed this pattern repeatedly – both within our own fund and among the specialist active managers we work with. Another recent trend has been the massive flow of retail money into investment vehicles with daily liquidity. This intensifies bond market volatility, especially when there’s a sell-off. Again, we view this volatility as an opportunity.”

Yael, how do you view the future of fixed income investing in a changing market?

Yael: “The demand for fixed income investments will continue to grow as investors seek stable returns. However, the strategy will need to evolve with the shifting economic landscape – particularly as inflation and geopolitical risks remain pressing concerns. Investors will need to stay adaptable.”

What stands out about Julius Baer’s online portal that allows financial intermediaries to manage client relationships?

Guy: “It’s intuitive, modern and comprehensive, offering all the key functionalities. Reporting is straightforward, and the portal allows users to price and trade a wide range of investment products as well as FX independently, reducing the need for back-and-forth communication with the trading team. Additionally, automated corporate actions and fee charging boosts our operational efficiency.”

Yael, how does technology play a role in managing fixed income portfolios effectively?

Yael: “Technology is absolutely central. Tools like automated reporting and portfolio management systems not only help reduce manual workload but also ensure faster, more accurate decision-making. These tools are critical for maintaining efficiency, especially as we handle more complex portfolios in today’s dynamic market.”

How important is data security and compliance in your day-to-day operations?

Guy: “It’s critical. Understanding the location and management of our data is essential, and we ensure compliance through multiple levels of verification.”

How do efficient reporting and analytics help your client service, especially for fixed income portfolios?

Guy: “They’re indispensable for adding value to our clients. We leverage both an external portfolio management system and Julius Baer’s reporting tools. Reconciling the two allows us to detect and resolve any discrepancies immediately and effectively. As most bonds are traded over-the-counter rather than on exchanges, obtaining reliable pricing data is crucial.”

How do you see clients’ expectations evolving?

Guy: “After years of a zero-rate environment, clients are demanding mid- to high-single-digit returns from their fixed income portfolios and risk diversification. They’re increasingly interested in sophisticated fixed income products and strategies where an active investment manager can deliver long-term results.”

Please note: The information provided is for educational purposes only.