Could there be a shortage of oil?
Could a lack of upstream investment lead to a shortage of oil and higher prices? We think lower investment was due to falling prices and believe it is now reversing. We remain wary of oil.
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An enhanced ESG Universal approach with UBS ETFs
In recent years, the concept of minimum ESG requirements has evolved, with additional business activity exclusions and climate considerations becoming the new norm.
Investing in the great transformation
2022 will mark a critical juncture on the road to a new economic and financial regime. Multiple coexisting transitions will drive the shift from the old to a new regime, that has already started in economic, social and geopolitical spheres,
UK payrolls point to smooth ending of furlough scheme
Uncertainty surrounding the effect of the end of the UK furlough scheme on unemployment had been top of the Bank of England’s (BoE) list of economic concerns, but last week’s jobs data provided reasons to be optimistic on this front.
Markets versus Policymakers: who’s in charge?
Economic data and market expectations have shifted dramatically in the past few months. Gross domestic product growth figures have disappointed while inflation has …
Liftoff? EM has already taken off
As U.S. inflation is hitting three-decade highs, market talk has been all about “liftoff:” When will the Federal Reserve and others start raising their policy rates? This is old news in emerging markets (EMs), where many countries have already raised
ESG is not a given, the battle for data has just begun
ESG (environmental, social, and governance) investing has been making news headlines recently. With the rising adoption of ESG worldwide, regulatory scrutiny has started to intensify. The focus of this attention has been the assessment of what is effectively the integration
Apartment Markets Remain Robust Despite Roaring Home Purchases
As the US Covid-19 shutdown took hold in March 2020, the US Federal Reserve (Fed) moved quickly and decisively to loosen interest rates and provide liquidity to counter the recessionary effects of the virus. On March 3, 2020, the Federal
An Asset Allocation Primer: Connecting Markowitz, Kelly and Risk Parity
As curious as it may sound, few asset allocation primers describe portfolio models while connecting them to each other. This article does so by describing and contrasting the mechanics of standard asset allocation models, including the utility-based, Markowitz, Kelly, risk
2022 Long-Term Capital Market Assumptions Full Report
Fading scars, enduring policies IN BRIEF Almost two years after the pandemic struck, the global economic recovery has strong momentum, kicked off by huge fiscal and monetary stimulus and now sustained by a robust capex cycle and solid household balance
Respecting Three Centuries of Correlation
In brief In recent decades, negative correlations between stocks and bonds have been a tailwind for asset allocators, but negative correlations have been the historical exception, not the rule. Investors may need to change their expectations given the potential for
What’s Hot: Red-hot inflation kindles a flame for commodities and gold
US Consumer Price Index (CPI) rose 6.2% in October 2020, marking the highest level of inflation since 1990. The print, released on Wednesday 10th November 2021, outstripped the Bloomberg consensus survey of 5.9%. The central bank mantra of inflation being
Green Sentiment, Stock Returns, and Corporate Behavior
In this paper, we propose a new method to estimate nonfundamental demand shocks for green financial assets based on the arbitrage activity of exchange-traded funds (ETFs). By estimating the monthly abnormal flows into environment-friendly ETFs, we construct a Green Sentiment
2022 Global Private Equity Outlook
The global private equity (PE) industry is scorching hot. Pent-up demand for deals was unleashed in H2 2020 following a brief hiatus as the COVID-19 pandemic sent economies all over the world into lockdown. As we head towards 2022, there
The Big Short(ages)
Shortages have challenged the recovery throughout this year, in a number of ways. Difficulties in supply chains and a slow return to work have persisted, while the costs of energy and housing are on the rise. These conditions are not
De natuurlijke rem op bevolkingsgroei
Er wonen ruim drie keer zoveel mensen op aarde dan 70 jaar geleden. Die toename verklaart voor een groot deel waarom we tegenwoordig veel meer vragen dan onze planeet ons kan geven. In de film ‘A Life on Our Planet’
2022 outlook: agility counts in a year of disruption and divergence
Investors should be proactive and prepare for volatility in 2022. The coming months will be dominated by decelerating economic growth, diverging central bank policies and persistent inflation. At the same time, it’s critical to align with the long-term trends –
Walking the delicate path to normalisation
European Gazette: As central banks move gingerly towards normalising monetary policy, a delicate balancing act is under way. They need to tighten policy – but neither too soon, nor too quickly. Indeed, the flattening of the US yield curve in
How To Analyse Discretionary Macro Fund
Whilst the definition is fairly broad, a traditional DMAC investment approach aims to build a balanced portfolio of directional trades that mix traditional and idiosyncratic premia (betas) by taking risk-on/risk-off positions using fundamental macro and market analyses that are not
The Case for Investing in Broad Commodities
Building Stronger Portfolios Despite being traded on exchanges for more than a century, commodities are the least well understood of the main asset classes. Over the last 20 years, this gap has begun to close, with many renowned academics pointing
The next phase for private credit markets
The changing landscape The resilience and adaptability of the asset class during the ongoing COVID-19 pandemic has helped to cement private credit’s permanence in the minds of strategic asset allocators, with private markets proving their value to investors in balancing
Playing second fiddle
US FIXED INCOME 2022 OUTLOOK That’s how the 2022 economic forecasts feel when compared to 2021. For ’22, we see real growth running about 4%, or two times trend. That’s typically great performance, but when you’re coming off a phenomenal
European markets have been strong
Market updates: At the start of the week, President Biden signed into law the $1.2 trillion infrastructure package. He is also set to announce a new US Federal Reserve Chief, which is expected to be either incumbent Jerome Powell or
Going with the trend
How CTAs work and what they can do in the age of low interest rates Commodity Trading Advisor (CTA) strategies are an investment success story. They have attracted large inflows of assets, drawn in by their ability to generate returns
Earnings momentum and a change in central bank tone
Supply chain constraints and higher input prices has led to worries that the transitory inflation story may last longer than anticipated. Markets have now become concerned that higher-than-expected inflation may incentivize Central Banks to increase the speed of future monetary
Global Asset Allocation 2022 Outlook
Given our view that 2022 will be a year of transition and that asset class returns will converge, we adopt a more balanced approach within our Model Asset Allocation, though still maintain a preference for cyclical assets. We reduce the
Gezonde Steden
De Covid-19-pandemie heeft de nadruk gelegd op gezondheid. Goed ontworpen en goed onderhouden steden zijn een belangrijk stukje van de puzzel. Slimme steden gaan niet alleen over robotica en futuristisch design. Om echt slim te zijn, moeten ze ook de
Visie op asset allocatie
NOVEMBER 2021 Economie VS vertraagt, eurozone nog sterk Monetair beleid stukje bij beetje minder stimulerend Winstcijfers steun voor aandelenmarkten Beleggingsbeleid ongewijzigd; overweging aandelen gehandhaafd
Vooroplopers en achterblijvers in duurzame transitie
De Investment Grade (IG) Green Bond markt is in rap tempo gegroeid tot groter dan € 400 miljard. Ter vergelijking: in 2016 was deze markt nog kleiner dan € 50 miljard. Hiermee is de € Green Bond markt inmiddels groter
Long Covid
In the short term, we are concerned that confidence in the growth outlook will wane, particularly given the recently weaker data in China, ‘stagflation risk’, and an earnings season dominated by the ‘margins squeeze’ story VIEWS & ASSET ALLOCATION Visibility
Inflation protection — Hope for the best, but build robust portfolios
Building a robust portfolio has gotten tougher The last two years have been full of extraordinary challenges. Following the outbreak of the pandemic, the lockdowns and restrictions imposed by governments around the globe hit economies and markets hard and fast.
The Great Inflation, Factors, and Stock Returns
“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.” — Ronald Reagan Inflation is an amorphous concept that generally refers to the sustained increase in the general level of
Podcast: Are central banks at an inflection point?
5 minutes with UBP global fixed income: What do you think of the recent communications from central banks? In this new podcast, our experts Bernard McGrath and Mohammed Kazmi share their views and reflect on the upcoming June meetings.
Can investors help bridge the US digital divide?
Fast and affordable internet service has become a critical component to working, studying, accessing health care and participating in the political process – both in the US and across the globe. In 2016, the United Nations went so far as
Process is everything for Pan European Smaller Companies
Two factors have interested us in Europe in 2021. First, there has been a value rally since November 2020, particularly in smaller companies. The onset of the pandemic in Europe in early 2020 initially saw value and cyclical stocks, typically
Solving the puzzle: ESG assessment in sovereign bond portfolios
Sovereigns are difficult to assess, given their complex social, economic, political, and geographic makeup. Environmental, Social and Governance (ESG) analysis of sovereigns is thus inherently complicated since it builds on an already-challenging typical sovereign assessment. In part, this is due
A Life on Our Planet
Er is veel geschreven over duurzaam beleggen en de noodzaak om de leefbaarheid van onze planeet te beschermen. Maar al die verhalen samen, hebben nog niet zoveel in beweging gebracht als A Life on Our Planet. Dat is een film
Asset Allocation Monthly
In the short term, we are concerned that confidence in the growth outlook will wane, particularly given the recently weaker data in China, ‘stagflation risk’, and an earnings season dominated by the ‘margins squeeze’ story. Visibility on the outlook has
A new dawn for Europe? Strategies to invest in European assets
Themes for Q4 and beyond for Europe Covid-19 cases are surging but the risk of generalised lockdowns is limited Robust Eurozone growth, will peak in 2021 and moderate in 2022-23
The Aerial View: Future-Proofing the U.S. Treasury Market
Recent stresses in U.S. Treasury trading have been incongruous with a market that holds itself out as the deepest and most liquid in the world. For those trading in March 2020, it was surprising how the pandemic-induced panic threatened the
Fed announces start of tapering
At its November meeting, the Federal Open Market Committee (FOMC) of the US Federal Reserve (Fed) left the target range for the federal funds rate at 0.00-0.25%. The Fed maintained its guidance on the policy rate, saying it expects to
Global Asset Allocation: The View From Europe
Just as the global economy is finally gaining traction after delta variant setbacks, some economies are facing severe energy shortages, with energy prices up over 70% since last year. The impacts are being felt across Europe, which is facing shortages
Outlook 2022 Get Ready for Change
Three dominant themes appear set to take precedence in the investment world in 2022. These megatrends will define the broad contours of the market outlook for next year, so an understanding of them is crucial for making investment decisions in
Africa 2021 A continent of opportunity
We believe that Africa will be the economic and investment story of this century. However, it is a continent of 54 countries, each with its own potential, pitfalls and capacity to absorb different forms of investment. The aim of this document is
The battle against stagflation
With the benefits of public sector largesse of 2020 and 2021 now fading, economies around the world are increasingly reliant on private sector demand and an increase in global trade to continue the pandemic-era expansion currently underway. However, the partially
The World Targets Change
Decarbonization targets are set to surge across all regions over the next three years. Already 20% have set targets. Asset owners say their responsibility to drive real change is as important as pure investment motivations. This is a major change
Het beleggingseffect van tektonische verschuivingen
Toen Joe Biden werd verkozen, werd er wereldwijd een zucht van verlichting geslaakt. Eindelijk waren ‘we’ verlost van een president die de wereld uit elkaar dreef. In de tijd dat Trump aan de macht was, stond een handelsoorlog regelmatig bovenaan
Communication breakdown.
Bond markets, which have been under considerable pressure recently, saw a very sharp turnaround last week as the US Federal Reserve did no more than expected in the US, while the Bank of England kept rates unchanged, and the European
Hoe korter hoe beter
Waarom beleggers in vastrentende waarden die zich zorgen maken over inflatie en stijgende rendementen, moeten overwegen om over te stappen op kortlopende obligaties. Moeten beleggers zich zorgen maken over de inflatie? Er zijn zeker redenen tot bezorgdheid. De knelpunten in
The pace of the global economic recovery
Market updates – 5 November 2021: Following September’s decline, US equities came back strongly in October following a better than expected Q3 results season. The month saw the S&P 500 up by 6.9% with a 3% gain in the last
