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Monthly Investment Outlook

Monthly Investment Outlook

We publish a Monthly Investment Outlook that highlights our convictions on equities and bonds, as well as recent asset allocation changes.


  • MONTHLY INVESTMENT OUTLOOK - A new policy regime emerging
  • GLOBAL TACTICAL ASSET ALLOCATION - Participating in markets’ upside through partially capital protected solutions
  • UBP ECONOMIC OUTLOOK - Look for moderate growth in 2020
  • UBP ECONOMIC OUTLOOK - Renewed global monetary support
  • GLOBAL EQUITIES - Higher valuations underpinned by the prospect of further monetary easing
  • GLOBAL BONDS - Focusing on risk management particularly in euro credit markets
  • RECENT VIEW CHANGES - Expanding asymmetry in our portfolios

  • In anticipation of central bank easing, spreads compressed in July especially in euro credit and US dollar investment grade markets while the euro and British pound weakened as global equity markets ground higher.
  • Recent economic disappointments appear to have hit a trough with a rebound in US business sentiment and industrial data in the eurozone. China saw a broad-based pickup in activity suggesting that the policy stimuli over the past year are supporting the economy subject to the traditional lag.
  • Though markets have grown increasingly optimistic on both the prospect and benefits of central bank rate cuts in the US and eurozone, central banks may opt to deliver more gradually than anticipated by markets posing a risk of a near-term rebound in volatility as seen earlier in the year. We view a new regime of combined increased monetary and fiscal activity heading into 2020 as a more credible catalyst to sustained growth and earnings looking forward.
  • Early results from the 2nd quarter earnings season have delivered the upside surprises anticipated given the conservative expectations in place. Corporate guidance appears stable suggesting limited downside risks to earnings expectations in the near term.
  • Equity valuations continue to press higher and now sit at their highest level in the past 12-months in the S&P 500. Global equity valuations excluding the US, while also expanding, remain just above their five-year lows. Sentiment measures have rebounded in markets from their bearish bias in June but remain well short of being excessively bullish which might signal near-term excess.
  • With expectations of central bank easing looking overly optimistic and US valuations at recent peaks, we still believe that our asymmetric equity exposure will prove valuable moving into the autumn. Following positive reform momentum in Brazil, we seek opportunities to add equity exposure there despite admittedly elevated valuations.
  • Given credit spread compression, especially in the euro credit markets, investors should increasingly focus on risk management rather than overreaching for returns in fixed income portfolios. Short duration, absolute return and hold to maturity strategies are warranted for euro investors given the near -40 bps German bund yields and tight credit spreads. In relative terms, we see value in European hybrid securities.
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Investment Outlook 2019

A look back on UBP's Investment Outlook

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