Time to think differently

Suni Harford, Head of Investments

2018 has already brought with it a fresh set of challenges for investors. Market conditions year-to-date have contrasted, sometimes sharply, with the low volatility and lower-for-longer narrative that dominated the broader market backdrop for much of the post-financial crisis. Inflationary fears have raised their head in the US for the first time in a decade. Broad-based geopolitical risks are also notably more elevated.

Yet we should not forget that while the global growth impulse has become less synchronized, the residual growth rate remains above trend. Monetary policy outside of the US also remains accommodative.

Nonetheless, returns from risk assets are likely to be lower in the coming years than investors have been used to. Given the combination of macro-economic uncertainty and heightened geopolitical risk, it also seems likely that the overall volatility regime will be higher for all asset classes compared to the low levels of volatility in 2017.

We therefore see this as an environment in which investors will have to think differently, work harder, and be more precise in their quest for attractive risk-adjusted returns. We also believe that it is an environment in which high conviction active investing is likely to prosper.

This edition of Panorama therefore focuses on the approaches and opportunities that we believe can help investors navigate this environment.

With a breadth of insights across both traditional and alternative asset classes, we trust you will find our mid-year update thought provoking and helpful in facing the investment challenges that lie ahead. In an environment of heightened risk and opportunity, thinking differently is likely to be a key to success.

Important legal information

To proceed, please confirm that you are a professional / qualified / institutional client and investor.

Views and opinions expressed are presented for informational purposes only and are a reflection of UBS Asset Management’s best judgment at the time a report or other content was compiled. UBS specifically prohibits the redistribution or reproduction of this material in whole or in part without the prior written permission of UBS and UBS accepts no liability whatsoever for the actions of third parties in this respect. The information and opinions contained in the content of this webpage have been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith but no responsibility is accepted for any errors or omissions. All such information and opinions are subject to change without notice but any obligation to update or alter forward-looking statement as a result of new information, future events, or otherwise is disclaimed. Source for all data/charts, if not stated otherwise: UBS Asset Management.
Any market or investment views expressed are not intended to be investment research. Materials have not been prepared to address requirements designed to promote the independence of investment research and are not subject to any prohibition on dealing ahead of the dissemination of investment research. The information contained in this webpage does not constitute a distribution, nor should it be considered a recommendation to purchase or sell any particular security or fund. The materials and content provided will not constitute investment advice and should not be relied upon as the basis for investment decisions. As individual situations may differ, clients should seek independent professional tax, legal, accounting or other specialist advisors as to the legal and tax implication of investing. Plan fiduciaries should determine whether an investment program is prudent in light of a plan's own circumstances and overall portfolio. A number of the comments in the content of this webpage are considered forward-looking statements. Actual future results, however, may vary materially. Past performance is no guarantee of future results. Potential for profit is accompanied by possibility of loss. 
© UBS 2021 The key symbol and UBS are among the registered and unregistered trademarks of UBS.