Tan notes at the CIO outlook conference that UBS’s base case is for a “soft landing”, where economic growth slows to just below trend. Inflation is expected to fall towards the US Federal Reserve’s (Fed) targets by 2H2024 and US interest rates will be cut four times throughout the year.
With a favourable trend in traditional tech exports and a declining US dollar, Tan Min Lan, Head of the Asia Pacific Investment Office at UBS Global Wealth Management, advises regional investors to uphold a well-balanced portfolio of equities, bonds and alternatives. This strategy is deemed the most effective for wealth preservation and growth.
UBS continues to see an upside for balanced portfolios in both its base case and upside scenarios. “In our capital market assumptions over the next five years, we believe a balanced portfolio of 45% stocks, 35% bonds and 20% alternatives will outperform cash by 5% annually. In other words, you can hold this portfolio over a 20- to 30-year time frame and it would deliver 3 to 4 times the cash returns over the period.”
