Overweight Eurozone equities; neutral U.S. equities

As we enter halfway through 2015, investors may be concerned about a potential Greek exit from the Eurozone and rising interest rates. However, stocks and high-yield credit are still poised to deliver solid returns in the months ahead, according to the Chief Investment Office Wealth Management Research (CIO WMR) in the latest UBS House View: Why markets can clear the hurdles. (PDF, 1 MB)

Even if Greece exits the Eurozone, CIO WMR maintains the European Central Bank has the power to step in and restore calm. And If the Federal Reserve raises rates, it’s not expected to be an obstacle to growth because of strong underlying economic fundamentals.

What should investors do?
CIO WMR maintains that investors on the sidelines in recent months should take advantage of the recent derating across all asset classes to rebalance their portfolios. They are projecting a 14% earnings rise for Eurozone equities this year and 4% growth in the United States. Emerging market equities remain less favorable.

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