Business Trial Group Investigates Investment Losses in UBS’s Yield Enhancement Strategy

Morgan & Morgan’s securities attorneys are investigating investment losses in UBS Wealth Management’s Yield Enhancement Strategy (YES).

UBS marketed YES as a conservative, market-neutral strategy and bond-portfolio enhancer. UBS told investors that YES would use a hedged, “iron condor” options strategy.  According to UBS, this strategy would generate consistent income while limiting risks to the premiums paid, even if markets turned bearish.  UBS represented to investors that YES would limit exposure to substantial market moves (up or down), and use protective options strategies to prepare for any unexpected volatility or market downturns.  Essentially, UBS sold YES as a strategy that would generate modest returns in both bull and bear markets, with limited risk.

But in reality, YES used high-risk leverage to trade options and make speculative bets that markets would remain calm and not turn volatile.  Most investors were unaware that YES offered relatively low upside with huge downside.

YES investments suffered significant losses in late 2018 when the markets became volatile, losing about 18% for the year (by contrast, the S&P 500 lost about 4% that same year).  In 2019, YES suffered losses of 2%, while the S&P 500 gained over 31%.  And YES again sustained substantial losses in February and March 2020, when market volatility returned amidst the coronavirus pandemic.

At their peak, YES investment holdings totaled about $6 billion in mid 2018.  UBS, however, may have charged excessive fees relating to YES investments.

If you have suffered losses in YES investments sold by UBS, we are here to help.  Contact us at (888) 251-2668 today to speak with an experienced securities attorney at Morgan & Morgan’s Business Trial Group.

The Business Trial Group at Morgan & Morgan helps investors recover their losses on a contingency basis.  We are only paid if we successfully recover money for you.  We have helped investors recover tens of millions of dollars of investment losses.

The Business Trial Group is part of the largest contingency law firm in the nation, with more than 700 lawyers and offices nationwide.  We aggressively fight for justice against brokerage firms, investment advisory firms, and banks.