Boosting Returns
Even so, Mark Haefele, CIO of UBS’s wealth-management unit, spent time traveling the world this year, trying to persuade clients to shift out of cash and bonds and into stocks to boost their returns.
Global equities have made 11 percent in the past six months, including re-invested dividends, while government bonds in Europe and Japan are only now starting to see their yields climb above zero percent, data compiled by Bloomberg show.
While many clients are engaged in a “hunt for yield,” UBS’s customer base overall “would benefit from moving out of bonds and cash” into stocks and higher-yielding alternatives such as hedge funds, said Haefele, who oversees $2.3 trillion.
“Political uncertainty is always difficult to price,” said Guido Fuerer, CIO of Swiss Re, who oversees assets of about $160 billion. “Going beyond politics and thinking about policy uncertainty more broadly, I see the Fed’s normalization path as very positive, not only for market stability but also for us as long-term investors.”
This article was provided by Bloomberg News.