The headline story of early 2019 for investors has been the dramatic upswing in global markets, especially in contrast to the drawdown and volatility spikes we saw in late 2018. But as always, the investment landscape is complex and a number of risks still lurk on the horizon.
China’s economic stabilization is certain to drive increased investment there. Today, most investors are underweight China relative to its share of global markets. We believe there is an increasingly strong case that the time has come for asset allocators to consider a standalone allocation to China.
Investors have been diversifying their portfolios into real assets and related alternatives for the last two decades and we expect this to continue. But the evolving global macro forces impacting regional economies and currencies underscores the need for a local market focus vs. a regional or global focus for real asset investments.
Sustainable investing has been around for at least 20 years. But in the last few years, investors have begun to understand that rather than just a ‘feel-good’ option, sustainability can also help improve and safeguard investment returns.
For fixed income investors, the US Fed’s decision to hold off on further rate hikes puts it in closer alignment with generally dovish central banks globally, which should help carry strategies continue to generate positive contributions to total returns for the remainder of 2019.
The strengthening US and Chinese economies should support emerging markets assets, which have provided a rich source of potential alpha for investors. But these markets also require a long-term strategy.
In the current economic environment, we believe active equity managers have an advantage with valuations that are no longer stretched on traditional metrics. In a world that is heavily exposed to passive equity and fixed income investments, we see a number of opportunities for excess returns that are only available to active managers.
With insights across both traditional and alternative asset classes, we trust you will find our mid-year update thought-provoking and helpful in meeting the investment challenges that lie ahead.
More from Panorama: Mid-Year 2019
The website contains general information about UBS Asset Management (Americas), Inc., UBS Hedge Fund Solutions LLC, and UBS O'Connor LLC, collectively known as "UBS Asset Management". The information contained on this website does not constitute investment advice or a recommendation to purchase or sell any securities or other financial instrument or any particular strategy or fund. Market commentary, product information and related performance data available on this website has been compiled from sources believed to be reliable and is provided in good faith for informational purposes only. UBS Asset Management does not guarantee the accuracy, suitability or completeness of information contained on this website, and all such information, including but not limited to performance data and related metrics, is subject to change without notice. Certain content on this website is intended for institutional investors and their financial representatives only, and should not be relied upon by retail investors or members of the general public.
Market commentary and similar statements contained herein are based on current expectations and may be considered “forward-looking statements.” Actual future results, however, may prove to be different from expectations. The opinions expressed are a reflection of UBS Asset Management’s best judgment at the time of posting, and any obligation to update or alter any forward-looking statement as a result of new information, future events, or otherwise is disclaimed.
Investments involve risks, are not guaranteed and may not return the original principal amount invested. Past performance is no guarantee of future results. Investors should read all available product information carefully before making an investment decision, including information about applicable risks, fees and expenses. This website does not address the investment objectives, risk tolerance or financial needs of any particular investor. In addition, any statements regarding investment performance expectations, risk and/or return targets do not constitute a representation or warranty that such expectations or targets will be achieved.
This website is not intended for persons located in any jurisdiction where the availability of this website is prohibited or contrary to local law or regulation or would subject any UBS entity to any registration or licensing requirement in any such jurisdiction.
Please confirm you are a US resident to proceed.