Capitalizing on China’s third wave Position your portfolio to capture long-term investment opportunities in China—and through sustainable global trends—with the new UBS House View

Key takeaways

  • China is underrepresented in most international investors’ portfolios, despite having the world’s second-largest equity market.
  • But the country is becoming increasingly integrated within global markets and international investors are gaining greater access to Chinese markets—resulting in a third wave of transformation.
  • For investors seeking opportunities in China, CIO Americas, Wealth Management (CIO-A WM) prefers stocks listed on the Hong Kong H-Shares market that trade at a discount to their equivalents on the Shanghai A-Shares market.
  • CIO-A WM also notes that the S&P New China and MSCI China indexes favor the growth parts of China’s market more so than the HSCEI and FTSE A50 indexes.
  • To help investors position their investments for future global trends, CIO-A WM is introducing 16 sustainable investment themes offering compelling long-term opportunities, especially for sustainably-minded investors.
  • CIO-A WM is increasing its overweight in global equities relative to government bonds. In fixed income, it is overweight U.S. high-yield bonds. In currencies, CIO-A WM favors the Swedish krona relative to the Swiss franc.
  • Talk to your UBS Financial Advisor about how you can best position your portfolio to take advantage of these evolving global trends and shifts in the investment landscape.

25 years ago, China’s exports were half of France’s. Now it’s the world’s largest supplier of manufactured goods. China’s second wave came as it grew its infrastructure and became the world’s largest importer of commodities. And now with the world’s manufacturing industries and commodity markets transformed, China’s third wave is approaching: the country’s capital markets are expected to become increasingly integrated within the global financial system.

For investors, this presents both opportunities and risks. How can you capitalize on China’s transformative growth without equitizing its debt—especially when China’s corporate debt-to-GDP ratio approaches the pre-crises levels of Spain and Japan?

CIO Americas, Wealth Management (CIO-A WM) offers investment strategies and specific asset allocation guidance to help investors participate in China’s growth while minimizing potential risks in its new UBS House View publication entitled: “The third wave (PDF, 2 MB).”

And, in continuing to offer investors forward looking global guidance, this edition of UBS House View also features 16 sustainable investment themes linked to important global trends such as population growth, urbanization and aging. These themes offer compelling long-term investment opportunities—especially for sustainably-minded investors seeking to generate financial returns and make a positive social impact. Key themes include:

  • Automation and robotics—the second industrial revolution will transform the future of manufacturing
  • Emerging market infrastructure—Growing global urbanization will drive demand for infrastructure investment
  • Energy efficiency—Strong drivers for energy efficiency offer long-term opportunities for sustainability investors
  • Water scarcity—If we can harness limited water resources, the benefits could be enormous.

For more on CIO WMR’s investment outlook and portfolio recommendations, read The third wave (PDF, 2 MB).

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

Join our UBS House View Monthly call

Next call: Thursday, June 1, 2017

Join us for our next UBS House View monthly call and get the latest on our market views and investment strategy guidance. * Mark your calendar as the UBS House View call takes place the first Thursday of every month at 1:00 p.m., ET/10:00 a.m., PT.

Call details:
U.S. toll-free dial in: 1-877-200-4456

International (toll) dial in: 785-424-1743
Participant code: 46502#

Listen to the replay from our May 4, 2017 call:

U.S. toll-free dial in: 866-415-9424
 International (toll) dial in: 205-476-0997
 Replay code: 46502#

*The views expressed on the call do not constitute a personal recommendation or take into account the particular investment objectives, investment strategies, financial situation and needs of any specific individuals. They are based on numerous assumptions. Different assumptions could result in materially different results. We recommend that you obtain financial and/or tax advice as to the implications (including tax) prior to investing.