Global Income Edge Aggressive Portfolio holding, wealth management and investment bank UBS (NYSE: UBS), was recently upgraded by credit rater S&P Global Ratings on its successful  strategy to reduce its debt that has increased its credit rating.

 UBS was raised from a BBB+ to A-, the seventh-highest investment grade, according to a report by Bloomberg.

S&P also stated that UBS should be able to deliver “satisfactory” returns for investors without further changes to the bank’s plan to focus on wealth management, first announced in 2012.

UBS was one of the first European investment banks to restructure and anticipate a move to wealth management. We believe this is a growth business given demographic trends such as retiring baby boomers and the increase in the size of the emerging market middle class, which needs financial advice on their retirement plan.

Between 2012 and 2015, UBS saw a 20% increase in revenues and a 2% increase in operating costs; its cost/income ratio fell from 95% to 81% 2015, according to one analysis. Consensus forecasts are for double digit returns on tangible common equity in 2016 with returns around 15%, even as the current slowdown in global growth makes for a challenging business environment that may trim this forecast somewhat.

The dismal start of the year did hurt earnings last quarter. UBS reported in early May that first quarter profit fell 64% to $707 million, missing analyst estimates, as all divisions dropped in earnings, as “heightened economic and geopolitical uncertainty, as well as global market volatility, led to more pronounced risk aversion,” the bank said.   The bank added that the result of this market volatility and investor risk aversion has been “abnormally low transaction volumes.”

We continue to believe that despite the recent headwinds on earnings, UBS has proved itself to be a formidable company worthy of investment, particularly as it has shown its mettle in continuing to be profitable, albeit less so, cutting costs and anticipating growth trends ahead of its less profitable peers.

With a yield of 5.88%, UBS is a Buy up to $25