From Adam Whiteley, Head of Global Credit at Insight Investment

Greetings from the Spanish coast in Catalonia, where the long warm evenings set the pace and life seems to move in slow motion relative to the daily grind of London. This is a favourite location for our annual family holiday, with the days drifting by between the beach, markets and shaded terraces. It’s also a location that carries many special memories, as it’s where my wife and I were married.

A Place for New Perspectives

Although the atmosphere is relaxed, it’s also full of life. Every meal is an occasion, and the fresh seafood makes the simplest restaurant feel like a gourmet meal. It’s a place that reminds you how valuable it is to step back from the day-to-day and regain some perspective. Life always feels better after time here, but it also leaves you recharged and ready to get back to markets.

Switzerland: A Promise of Quality

Switzerland is also a country close to my heart, but for different reasons. There is a deep appreciation for quality, whether it’s the food, the surroundings or the craftsmanship behind everyday things. Combined with the striking landscape, visiting is always a distinctive and memorable experience.

Equally compelling is the sophistication of the client base we have in Switzerland. The working culture is professional, thoughtful and highly collaborative, which makes helping our clients solve their distinct investment challenges an especially enjoyable task.

Adam Whiteley at Insight Investment. (Image: Courtesy)

Swiss Bonds Under Pressure

Perhaps the most pressing challenge facing our clients right now is the exceptionally low level of Swiss bond yields, which have moved lower even as yields in most other major markets have risen. It is difficult to see much further room to rally from here, while yields in Switzerland are so low that maintaining a purely domestic focus is increasingly hard to justify.

Why Flexibility Is Becoming More Important

In contrast, global fixed income markets offer a far broader opportunity set, both in terms of diversification and the potential to generate alpha. By going global, investors can access areas of the market where valuations, structural trends or inefficiencies create more attractive return opportunities.

However, it’s important to recognize that high debt levels and persistent inflation are driving increased volatility at the long end of many yield curves. This leaves us of the view that flexibility and resilience now matter more than simply passively holding duration. In international bond markets investors can tilt towards high quality credit, but in shorter maturity or absolute return strategies. These more resilient approaches are typically less exposed to yield volatility. When managed well, such strategies have the potential to generate attractive risk adjusted returns relative to Swiss bonds, even after currency hedging.

AI Infrastructure as a Credit Story

As active managers, we can allocate towards areas we believe offer the most value, while avoiding those that do not. One compelling opportunity we are currently seeing is the AI infrastructure build out. AI‑driven capital spending is accelerating at an extraordinary pace, and we expect the technology sector to become the single largest source of issuance in the US investment‑grade market – ultimately overtaking financials.

More Than Just a Tech Craze

The scale of funding required to build out AI infrastructure is unprecedented: data‑centre construction, grid expansion, power generation, fibre networks, towers, cooling systems, and new semiconductor capacity are all triggering a multi‑year financing cycle. Crucially, this wave of borrowing is structurally different from past tech‑related issuance, tied to revenue‑generating, often contracted or regulated infrastructure, not speculative moonshots. That shift gives investors access to more stable cashflows, clearer visibility, and attractive risk‑adjusted returns.

Securitization is Back in the Spotlight

Another development we believe Swiss investors should keep a close eye on is European securitisation reform. If rules are simplified, we could see a boom in high quality securitisation as banks recycle capital and extend more credit to households and businesses while creating high-quality assets for investors. The current framework is too complex and restrictive, limiting both issuance and demand when it should be supporting investment across the economy. If successful, this could boost growth across the eurozone, while providing a deep pool.