Uncovering opportunities Overweight global equities, U.S. equities and U.S. high-yield credit vs. government bonds

As the U.S. and U.K. threaten to back away from globalization, where will the next phase of investment opportunities be found? Who might benefit most from a less internationally-focused United States, and what investment opportunities would grow stronger if the public sector pulls back from global engagement? CIO Wealth Management Research (CIO WMR) shows how investors could benefit from this environment in the new UBS House View: Uncovering opportunities (PDF, 3 MB).

Overall, CIO WMR expects continued global growth and central bank support against a backdrop of political uncertainty and views current global equity earnings-per-share growth as sufficient to drive markets higher. For U.S. equities, the economic backdrop is strong. The ISM Manufacturing index is at its highest level in two years, wage growth is the fastest since 2009 and small business confidence is at a 12-year high.

Key takeaways

  • While global equities are no longer undervalued, CIO Wealth Management Research (CIO WMR) believes earnings-per-share growth is still sufficient to drive markets higher.
  • CIO WMR expects U.S. earnings growth to accelerate to 11% this year, supporting their favorable outlook for U.S. equities.
  • CIO WMR is also overweight U.S. high-yield credit vs. government bonds, given the solid fundamentals in the U.S.
  • Investors should look for opportunities within the UN Sustainable Investment Goals, including themes such as energy efficiency and emerging market healthcare.
  • Talk to your UBS Financial Advisor about how you can best position your portfolio to take advantage of these upcoming global trends and shifts in the investment landscape.

CIO WMR also believes the UN Sustainable Investment Goals (SDGs) could offer investors opportunities as regulatory demand for achieving SDGs creates a funding gap for many countries that private investors could potentially fill.

In fixed income, CIO WMR is overweight U.S. high-yield credit vs. government bonds. Strong economic performance, rising business sentiment and recent oil price rises reduce the risk of defaults among U.S. high-yield issuers.

Is your portfolio prepared for expected global shifts? Together we can find an answer. Connect with your UBS Financial Advisor or find one.

Next call: Thursday, March 2, 2017

Join us as Jeremy Zirin, Chief Equity UBS Wealth Management Americas leads the discussion on 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.Strategist

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 February 2, 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.