Are the economic headlines overblown?

Strategically position your portfolio amid the media noise
with UBS House View: Fakenomics?

24 Apr 2017

Key takeaways

  • Global economic and profit cycles will not depend on a single data point or earnings post. CIO Wealth Management Research (CIO WMR) takes a comprehensive view and offers specific specific asset allocation guidance to address a continually evolving, complex global investment landscape.
  • Economic and profit growth still look healthy in the U.S. Despite difficulties passing healthcare reform, CIO WMR currently finds markets too pessimistic on the changes of meaningful U.S. tax reform.
  • CIO WMR remains overweight U.S. and global equities vs. government bonds. In currency, CIO WMR favors the euro vs. the U.S. dollar.
  • Talk to your UBS Financial Advisor about how you can best position your portfolio to take advantage of these emerging global trends and shifts in the investment landscape.

Five months after the U.S. election, reforms of healthcare, infrastructure, and tax legislation have not yet occurred. Far from rising to greater heights, the U.S. dollar has fallen 3% from its post-election peak. And contrary to early headlines, the U.S. administrations’ pro-Russia, anti-China and anti-Fed positions have all changed in the last month: The U.S. antagonized Russia with an airstrike on Syria; the president doesn’t see China as a currency manipulator; and he now says he “likes a low interest rate policy.”

Complex stories don’t always neatly fit into a newspaper headline.

As an investor searching for sound long-term strategies, how do you navigate the differences between extreme predictions and larger, market complexities? CIO Wealth Management Research (CIO WMR) takes a comprehensive approach and looks beyond a simple “risk-on” or “risk-off” investment strategy to offer specific asset allocation guidance in the new UBS House View: Fakenomics (PDF, 2 MB)? Given this continually evolving, increasingly complex investment landscape, CIO WMR is:

  1. Overweight U.S. and global equities vs. government bonds
  2. Highlighting a preference for the Euro over the U.S. dollar and is neutral on eurozone equities
  3. Closing its overweight position on 10-year U.S. Treasuries vs. U.S. dollar cash
  4. Overweight U.S. high-yield bonds vs. government bonds
  5. Closing its recommended position in a basket of emerging market currencies vs. a selection of developed market currencies.

For more on CIO WMR’s portfolio recommendations, read “Fakenomics? (PDF, 2 MB)”.

Is your portfolio prepared for a complex global investment environment? Together we can find an answer. Connect with your UBS Financial Advisor or find one.