UBS Investor Forum

Challenging the UBS House View

Every month, we invite global investment leaders from the fund management industry to challenge our UBS House View. We address global financial questions to make sure we never sin by over-confidence.


Which Asian markets could be attractive for investors?

View from the Street

Andrew Wilson, CEO of Goldman Sachs Asset Management International for EMEA and Co-Head of Fixed Income, 18th September 2017

UBS view

At UBS we remain overweight on China, Indonesia and Thailand in our regional tactical asset allocation. For Thailand, we have seen a strong rebound in recent weeks, driven by higher oil prices and nascent signs of a pick-up in consumption. Thailand has rebounded well in the past few weeks as commodity prices and economic activity, including exports and imports, revived. We see more upside potential in Thailand for the rest of the year. Likewise, we see improvements in Indonesia as recent interest rate cuts drive a recovery in investment and consumption in 2H17. The recent rating upgrade for Indonesian sovereign bonds is another strong sign that the economy has gained traction.

Which Asian markets could be attractive for investors?

Poll Form

With regards to China, where do you see the biggest risks for investors?

View from the street

Catherine Yeung, Investment Director at Fidelity, 16th October 2017

UBS view

At UBS we believe that the high leverage, especially in the corporate sector and local governments, is a key risk in China's development. Although we still view a full-scale financial and economic crisis in China as highly unlikely, the risk of a regional or sector-specific credit crunch is not negligible. In the short term, cooling housing market and slowing infrastructure investment could weigh on GDP growth. Stricter regulatory tightening is a potential policy risk, but we expect the government to make a balance between regulatory tightening and growth.

Where do you see the biggest risk in China?

Poll Form

Where do you still see value within the equity markets?

View from the Street

Johanna Kyrklund, Global Head of Multi Asset Investments at Schroders, 18thSeptember 2017

UBS view

At UBS, we have a more positive view. We maintain our overweight position on Eurozone equities against UK equities. Leading domestic economic indicators in the Eurozone remain very strong and support domestically generated earnings growth. Also, the Eurozone is in a position to benefit strongly from its high gearing to the global business cycle. Meanwhile, UK equities earnings growth should decelerate over the coming months. We maintain an overweight position in global equities (and US high grade bonds) against euro high yield bonds.

Do you see value in equity markets?

Poll Form

What are you recommending to investors within fixed income?

View from the Street

Nicola Mai, Sovereign credit analyst at PIMCO, 16th October 2017

UBS view

Yields are low across all fixed income asset classes, providing a challenging backdrop for bond investors. But some areas still look more attractive than others. We at UBS think emerging market bonds are among the most attractive investment opportunities within the bond universe. Meanwhile, we recommend to reduce exposure to high yield bonds in euro, where yields at all-time lows do not compensate well for the risks. We also think investors are underpricing the number of Fed rate hikes over the coming years, and thus we overweight cash against 2-year Treasury bonds, which should decline further.

Do you invest in fixed income?

Poll Form

How do you build a good portfolio going into 2018?

View from the Street

William Davies, Global Head of Equities at Columbia Threadneedle, 16th October 2017

UBS view

Certain broad investing principles will be as important in 2018 as in any other year. There will be plenty of risks to investors over the coming year, from geopolitical threats such the North Korean crisis to the possibility of policy error as central banks start to lessen monetary stimulus. Since it is never clear which risks will materialize diversification will be key, both geographically and between asset classes. But we believe that the strength of the global economy and earnings growth will enable equities to continue to grind higher. We remain overweight global equities.

Are you already planning your portfolio for 2018?

Poll Form

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