UBS Wealth Insights 2014 Embracing change and seizing opportunities

“Across the world, global growth is shifting up from around 2.5% in 2013 to about 3.4% in 2014.”

Launched in 2013 to resounding success, UBS Wealth Insights is already regarded as a flagship conference in the UBS Wealth Management client engagement calendar in Asia Pacific. Along with the UBS House View, the program offers Wealth Management clients independent, insightful content from global experts and renowned opinion leaders.

Alexander S. Friedman
Global Chief Investment Officer, UBS Wealth Management

Building on the success of last year’s event, UBS Wealth Insights 2014 was held in Singapore, Hong Kong and Tokyo this January, attracting more than 3,600 guests.

The Singapore event was opened by Edmund Koh, CEO of UBS Wealth Management for Southeast Asia and APAC Hub. In his opening speech to guests, Mr. Koh commented: “As the global macro backdrop continues to evolve in 2014, and just-in-time policy making becomes a norm, investors will not only need to be kept well-informed, but also be even more agile and willing to embrace change.’’

The US recovery and its impact on global market

Alexander Friedman, Global Chief Investment Officer (CIO) for UBS Wealth Management, was one of the keynote speakers. Predicting a better year for the global economy in 2014, he noted: “Across the world, global growth is shifting up from around 2.5% in 2013 to about 3.4% in 2014. In the United States, we think growth will move from 2013’s 1.9%, to about 3.0% and maybe even a little more for 2014.’’

Mr. Friedman believes the US economy is hitting a self-sustained recovery for a number of reasons. He told guests: “We think cap-ex (capital expenditure) acceleration – companies spending more – will be an important story in 2014. Overall monetary policy is still loose enough for financing to be available. So in the United States, the outlook is reasonably good.’’

Also speaking at the event were other global investment and economic experts from UBS, former US Treasury Secretary Timothy Geithner, and industry leaders BlackRock and PIMCO. A variety of subjects were covered, including the health of the Eurozone, building lifetime portfolios, and strategic asset allocation. Interestingly, a poll taken at the event asked UBS guests which asset class they thought would perform the best in 2014. Almost two thirds (65%) chose developed market equities, with 19% voting for Asian stocks.

The outlook from the CIO on emerging markets was also for accelerating growth, predicting growth to shift up from about 4.3% to 4.9%. For Asia, excluding Japan, Mr. Friedman predicted about 6% growth. China, the world’s second biggest economy and the lynchpin of Asia, was projected to grow by more than 7.5% year-on-year in 2014.

Paul Donovan (left), Senior Global Economist, UBS Investment Bank; Mark Haefele (middle), Global Head of Investment, Chief Investment Office, UBS Wealth Management; Tan Min Lan (right), APAC Regional Head, Chief Investment Office, UBS Wealth Management

“Diversify outside of Asia to take advantage of the monetary stimulus being provided by developed economies.”

The case for equities 

While the economic climate looks to be improving, this may not automatically translate into better investment returns. Mr. Friedman added: “Remember we are entering a different scenario. In the past, we have had limited economic growth, yet experienced great investment returns. Now we are moving to a world where we have better growth, but investment returns that are probably not going to be as good. This is because investment returns from now on are going to be driven by the corporate fundamentals, not so much by monetary policy.’’

While this presents challenges to investors for the year ahead, the consensus was that equities are still the most attractive asset class, and preferable to parking your funds in cash. Tan Min Lan, APAC Regional Head, UBS CIO Wealth Management, also advocated stock market investing. She said: “We see good value in equities. Increased economic growth and corporate earnings should justify a solid equity allocation in your portfolio. Get out of any overallocation in high grade bonds.”

A strategic house view with global perspectives

UBS Wealth Management’s Chief Investment Office plays an integral role in the company, providing an investment house view which is filtered down throughout the organization. This house view – which includes both strategic and tactical asset allocation – is informed by a systematic and integrated investment process, which leverages the expertize of more than 900 UBS investment experts from around the globe. This is also in consultation with external investment managers of some of the largest and best performing funds in the world.

When it comes to diversification, Mark Haefele, Global Head of Investment, UBS CIO Wealth Management, said at one of the panel discussions: ‘’Diversify outside of Asia to take advantage of the monetary stimulus being provided by developed economies. Currently, we favor the US and European markets.’’

In all three locations, guests were given an opportunity to dive deeper into topics that mattered most to their investment strategy, ranging from tips on avoiding big investment stakes, to the turnaround of the European markets and how to invest through volatility.


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