Newsroom

Trump's return to the White House marks the start of a new era that is set to boost US-based companies while the wider global investment landscape continues to contract. 

Infrastructure assets provide essential services to communities, facilitating the transport of people, data, and energy.

Several central banks, including the Federal Reserve, Bank of England, and European Central Bank, have ushered in a new era of rate-cutting, signalling the end to their fight against inflation. But what does this easing cycle mean for asset classes?

The global economy is becoming more fragmented, creating a complex landscape for investors and policymakers. Geopolitical events, such as the US elections, the Ukraine-Russia war, and heightened tensions in the Middle East, are amplifying market uncertainties. In response, we have raised our conviction on gold from 3/5 to 4/5.

Direct lending, the biggest segment in private debt, is now accessible to a broader range of investors and seeing increasing demand, boosted by its superior risk-adjusted returns and attractive features that include speed and certainty of execution.

Over the past 15 months, most asset classes have put in positive performances. However, we’ve entered a transitional phase marked by rising volatility, political risks, and market dissonance. To navigate this shifting landscape, we have reduced our global equity exposure and increased our conviction on hedge funds, as alternative investments are well-positioned to capitalise on current market uncertainties.

Earlier in August, global equity markets tumbled due to disappointing US macro data and the unwinding of the Yen carry trade. However, as we expect elevated market volatility until the US Presidential election in November, it may be premature to consider buying the dip.

The attempted assassination of Donald Trump, Joe Biden's withdrawal from the race, and the rise of Kamala Harris: unexpected twists have emerged in the US presidential election. 

Equity markets rallied during the first half of the year, driven by earnings growth, a macro backdrop that was more resilient than expected, and continued appetite for AI winners (the “Magnificent 7”). Looking ahead, we anticipate a broadening of equity markets’ leadership. Read more about our insights in the July edition of UBP’s House View.

Our experts examine the tumultuous US election landscape and historical market behaviour during election years, as well as anticipate the fiscal challenges awaiting the next president amidst record-high US federal debt levels.

Against a higher-for-longer interest rate landscape and limited potential for spread compression, fixed income returns will mainly derive from carry.

Eased ECB policies will boost Europe's recovery. As US growth normalises, developed market economies should converge in the second half of the year, while recent regional market rallies have reinforced our confidence in the UK and Switzerland.