1. Newsroom
  2. Managing Risks in a Fragmented Global Economy
Menu
UBP in der Presse 20.12.2018

Managing Risks in a Fragmented Global Economy

Managing Risks in a Fragmented Global Economy

Agefi (18.12.2018) - Entering 2018 investors brimmed with enthusiasm as global synchronised growth continued like in 2017, confirming that the world was finally moving on after the crisis.


However, while financial markets remained attractive, monetary policy normalisation combined with near historically high equity valuations, near all-time low bond yields, and record tight credit spreads soon led investors to expect more modest performances and heightened volatility. Although markets promise to hold up in 2019, the landscape is starting to look patchy: we believe that desynchronisation between economies will be the dominant theme in the coming year.

The US remains ahead in the economic and monetary cycle, driving strength in the dollar. Europe has finally managed to break out of its post-crisis deflation, but the continent’s recovery is sluggish and its growth pattern fragmented. As for emerging markets, they have dislocated with Asia remaining on track, while Latin America, Eastern Europe and the Middle East are all seeing sharp dispersion.

Amid a tense geopolitical climate, especially in Europe and the Middle East, this desynchronisation is impairing visibility and heightening risks. Meanwhile central banks’ policy tightening is going to put pressure on longer-term yields and fresh trade tariffs may be on the cards for China and perhaps for European and Japanese carmakers too.

Our risk-focused approach has enabled us to seek short-duration exposure to weather the sell-off in bonds throughout 2018 while a rotation to non-corporate credit solutions has provided shelter from the volatility across fixed income markets. For 2019 we are maintaining our short-duration exposure on the US market. Investors should tread carefully in Europe, although given the region’s three-year lag its bond markets should see repricing and curve-steepening.

With modest return prospects across traditional asset classes in 2019, we encourage investors to reposition tactically across both structured products and hedge fund strategies to contain downside risk in this period of rising volatility.

Corporates now face growing cost pressure and more limited earnings growth. Capital-protected equity exposure helps shield against mounting uncertainties. Our preference has moved away from the energy sector and focuses on bottom- up innovation, not only in technology, but also in the healthcare sector. Strategically, investors have an opportunity to shift their focus while at the same time stretching time horizons and to lean more heavily on secular trends and company analysis to add value. In particular, impact investing should continue to grow as millennial investors enter the market.

Investment expertise

LOK Michael.jpg

Michaël Lok
Co-CEO Asset Management & Group CIO

Insight

Navigating wealth succession in Asian families

Wealth succession is complex, emotional and can be costly if not managed properly

Read more

Meistgelesene News

UBP in der Presse 02.04.2019

Zürich ist ein zentrales Standbein für die UBP

Le Temps (29.03.2019) - Vor genau vier Jahren hat die UBP die Privatbank Coutts übernommen. Heute verwaltet UBP 25 Milliarden Franken in der Wirtschaftsmetropole der Schweiz und hat damit ihre Kundenvermögen innerhalb von fünf Jahren verdoppelt. Wir haben Adrian Künzi, Leiter der UBP Zürich, getroffen.

UBP in der Presse 26.03.2019

UBP is ready for all Brexit eventualities

AWP (25.03.2019) - Union Bancaire Privée (UBP) anticipated the uncertainties surrounding future relations between the United Kingdom and the European Union. By expanding in London with the acquisition of ACPI and maintaining a strong presence in Luxembourg, the Geneva bank is prepared for any outcome, as its CEO Guy de Picciotto explained to AWP.

UBP in der Presse 03.04.2019

Taking on more credit risk

Option Finance (21.03.2019) - With economic growth returning to normal, the end of central-bank monetary tightening and an upturn in volatility, bond management could benefit from three main approaches: gradually taking on more credit risk, increasing duration, and seeking liquidity.

Auch lesenswert

UBP in der Presse 30.07.2019

Gewinne mitnehmen oder Korrektur riskieren

Le Temps (29.07.2019) - Nach einem fulminanten ersten Halbjahr dürften die nächsten sechs Monate äusserst spannend für die aktiven Manager werden.

UBP in der Presse 28.06.2019

The wealthiest families are the biggest risk-takers

Le Temps (24.06.2019) - Family offices keep multiplying in Switzerland and elsewhere. They are drawing in financial investments from entrepreneurs with a riskier strategy than pension funds, and are also being entrusted with other key tasks.

UBP in der Presse 17.06.2019

Investing in disruptive innovation

Forbes Middle East (06.2019) - Whereas the financial markets have always tended to focus on the short term, investors need to think beyond that horizon and look further ahead.