UBS' Foster backs MBS as QE worries grow

UBS head of fixed income capability Simon Foster is considering moving assets in to mortgage backed securities (MBS) as fears over the potential end of quantitative easing (QE) weigh heavy on investors.

Foster, who oversees a range of funds at UBS, said the Federal Reserve's hint it may begin to 'taper' off its stimulus programme has caused consternation within markets, and could present a buying opportunity.  "You have the regulatory changes which people are scared about, and they are also concerned the end of quantitative easing means people will stop buying mortgages, so MBS are climbing up and we are looking in to them at the moment," he explained. The manager is also seeing significant opportunities in financial debt, and prefers the lower subordinated bonds of the bigger banks....