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.

How should investors manage political risk?

John Bennett, Head of European Equities at Henderson, June 19th 2017

External view

UBS view

We agree that investors should focus primarily on fundamentals. Political outcomes are binary events that investors can't influence. Our approach is to be ready for all scenarios. In our Risk Radar, we monitor key geo-political risks and assign outcome probabilities. We use that to make investment decisions.

Are you worried politics can hurt your portfolio?

Poll Form

What are the biggest opportunities for fixed income investors?

Karl Dasher, CEO North America and co-Head of Fixed Income at Schroders, June 19th 2017

UBS view

External view

We favor replacing well-worn bonds and looking for opportunities in US high yield credit. US senior loans are also an attractive alternative for qualified investors who are comfortable with less liquid assets. Their floating coupon rate should benefit from an increase in US short-term interest rates. Corporate hybrids are another niche segment we like. At current spread levels, they compensate investors with a suitable risk tolerance for assuming the risks associated with them. We expect mid-single-digit percentage returns on selected instruments over 12 months.

Are you holding high yield bonds?

Poll Form

Europe: Which sector is most promising? Which is most at risk?

John Bennett, Head of European Equities at Henderson, June 19th 2017

External view

UBS view

We agree with John: Financials is our preferred sector in the Eurozone. We also like energy and materials. More generally, Eurozone equities are one of our most preferred asset class right now, benefiting from the positive domestic and global macroeconomic backdrop. Political risks have subsided further as the French parliamentary election outcome gives En Marche! a majority to conduct pro-growth reforms.

Do you invest in European banks?

Poll Form

Why do you overweight equities?

Richard Lacaille, Global Chief Investment Officer at State Street Global Advisors, June 19th 2017

UBS view

External view

At UBS, we agree. We recommend an overweight allocation to global equities versus an underweight in high grade bonds. Global equities' earnings growth is supported by healthy and healing labor markets, benign liquidity conditions, and economic lead indicators that signal solid economic growth ahead. We particularly like Eurozone equities, and are underweight UK equities.

What part of your portfolio do you invest in equities?

Poll Form

Why Environmental and Social Governance (ESG) will change the investment industry

Interview with Neil Dwane, Portfolio Manager & Global Strategist, Allianz Global Investors, 15th 2017

External view

UBS view

Environmental, social and governance (ESG) policies will be key features changing the face of the financial industry.

At UBS, we recognize this trend and embrace it as a chance to make a positive change. We've recently committed to raise CHF 5bn of investments to fund sustainable and impact investing initiatives. We write about the topic in our blog ubs.com/SII.

Do you plan to invest according to ESG standards?

Poll Form

Where is the biggest investment opportunity in Europe?

Interview with Neil Dwane, Portfolio Manager & Global Strategist, Allianz Global Investors, 15th 2017

UBS view

External view

We agree. We are overweight Eurozone equities where we believe companies are benefiting strongly from the positive domestic and global growth environment.

The market-friendly outcome of the French presidential elections has cleared the way for fundamentals to play out. We expect earnings to grow in low double digits in 2017, and we prefer energy, materials and financials. 

Are you actively investing in Europe?

Poll Form

About the Investor Forum

 

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