Built for shifting times

The only constant in asset management is change - rarely has this statement felt more relevant than it does today. We are living through a period in which markets, politics, and investor behavior are all shifting simultaneously. As one of our clients recently put it: “It’s not the volatility that worries me – it’s that everything is moving at once.”

From central bank policy to geopolitical alliances, from inflation dynamics to innovation, asset managers and sovereign institutions are navigating a world in flux. At UBS Asset Management, our role is not just to respond to this environment – but to support clients in responding with clarity and discipline.

Navigating change with clients at the center

So how do asset managers respond to this shifting reality? One way is by listening closely to the institutions at the heart of the global financial system.

At this year’s UBS Reserve Management Seminar, we engaged with more than 70 central banks and sovereign institutions. The conversations were striking – less concerned with the next interest rate move and more focused on the structural changes reshaping global capital flows.

Will tariffs, fiscal expansion, and immigration policy under Trump 2.0 lead to stagflation?
Can the euro regain credibility as a reserve currency?
Are gold and crypto emerging as hedges in a world of political fragmentation?

The results of our RMS survey reflected these concerns. For the first time in over a decade, political risk overtook traditional macro factors as the top issue for reserve managers. Stagflation is now seen as the base case by a majority of respondents. And the US dollar – long the cornerstone of global reserves – is being reconsidered. Allocations to EUR and RMB are rising. Gold demand is surging. And remarkably, crypto now ranks third among potential reserve beneficiaries.

This shift is not just academic. It’s redefining how institutional clients evaluate risk, resilience, and strategic partnerships.

What it takes to serve clients in this environment

At UBS Asset Management, we work alongside sovereign and institutional clients, as they respond to today’s evolving challenges – providing access to investment capabilities, strategic insights, and a global platform built for flexibility.

That’s why we’ve built our offering around four core principles:

Flexibility: Strategies that span asset classes and geographies, allowing clients to pivot portfolios with confidence

Innovation: A focus on developing investment solutions that address evolving client needs – from low-cost ETFs to fixed income and digital solutions

Conviction: A forward-looking approach anchored in long-term themes and deep investment insight

Partnership: Advisory relationships grounded in trust, research access, and shared understanding

Because in times like these, clients may pause – but they don’t stand still.

Client reactions – from pause to pivot

What we’ve observed in recent months is not panic, but deliberate reallocation.

Many institutional clients are selectively re-risking, especially into credit segments such as high yield and senior loans
March 2025 saw the largest rotation into European equities since 1999 – confirmed by ETF flows: EUR 14.6bn into EU equities, and EUR 2.85bn out of US markets
Sovereign wealth funds are reallocating from US assets toward Europe, Japan, and emerging markets
Some institutional investors are reassessing US exposures, with growing interest in European credit and real estate
One client recently paused a US focused loan strategy in light of heightened political uncertainty

At UBS Asset Management, we offer clients access to diversified strategies that are structured to respond to different market environment and policy regimes.

Our response: Agility, innovation, and partnership

We are not standing still either. Here’s how we’re evolving:

We’re broadening our ETF platform, with new Core ETFs and the launch of our first active fixed income ETF, which invests in the highest-rated tranches of collateralized loan obligations – developed in collaboration with our Credit Investments Group (CIG) – and additional products planned for 2025.
We’re investing in digital capabilities, from AI-enhanced investment processes to analysis of the implications of Central Bank Digital Currencies (CBDCs)
We’re working directly with sovereign clients to refine investment frameworks, provide strategic training, and offer access to UBS’s full intellectual capital

And critically, we maintain one of the few dedicated global teams focused specifically on central banks and sovereign institutions – because we know this client segment requires specialized solutions and consistent engagement.

Turning disruption into direction

The question is no longer “Will the world change? – it’s “How do we respond?” At UBS Asset Management, we work alongside our clients to help them navigate these shifts with perspective and purpose.
We are globally connected. Locally present, committed to long-term partnerships and focused on our clients. Driven by change.

As global dynamics continue to evolve, our role is not just to support adaptation, but to help clients prepare for what’s next. Through long-term partnerships, forward-looking research, and ongoing innovation, we aim to provide clarity amid complexity – helping clients navigate change with confidence.

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