UBS: staying ahead of volatility

UBS is the world’s largest global wealth manager and winner of multiple awards, including Global Best Overall Private Banking Services in the Euromoney Private Banking Survey 2019. For 14 years, the annual UBS Forum has been held in the UK and Jersey, providing analysis and key insights to private investors. The recent 2019 forum saw speakers Dean Turner, Caroline Simmons and James Mulford, all from UBS, and Thomas Raines, from Chatham House, deliver a series of informative presentations where the subject of volatility was high on the agenda

2018 was the ninth consecutive year of growth for the global economy. However, it is becoming clear that a turning point has potentially been reached, with growth slowing and the expectation that this deceleration will continue in 2019. 

Economist Dean Turner, from the UK Investment Office at UBS Wealth Management, believes that we are now in a mature phase of the economic growth cycle, but a recession in 2019 is extremely unlikely. And whilst the volatile political environment hasn’t previously had an impact on overall market conditions, there are signs that these have the potential to evolve into economic challenges, with examples such as the US/China trade dispute and the effects of the Italian government policies on bond markets. 

However, Dean is quick to highlight that not all political risk presents a downside. “Despite all of the volatility we have had in emerging markets, from an economic perspective, predicted growth expectations were largely met, in spite of the head winds of high US interest rates and a much stronger US dollar than expected,” Dean says. 

“In 2019, economic growth is set to slow across all of the major economic blocks compared with 2017/18, which saw the fastest rates of economic growth for the global economy since the start of the decade. Economic growth has provided a tail wind for the markets over the last couple of years and as it slows it may lead some investors to question if the end of the economic cycle is approaching.”

Political volatility

There has been an obvious global trend towards populist governments being elected and there is every likelihood of populism and protectionism staying on the radar throughout 2019. Thomas Raines, Head of the Europe Programme at Chatham House, is keen to point out, though, that political volatility is not a new concept, but has trended upwards since the 1970s, along with the decline of party identification and voters being less loyal. 

Investment opportunities remain

With such a potentially concerning political and economic environment, however, the message from UBS is still a positive one, as they continue to outperform peers and win awards. 

Caroline Simmons, Deputy Head of the UK Investment Office at UBS Wealth Management, is clear that whilst market volatility is unlikely to go away, it is too early to sell equities. This is because historically, they have performed well in the late cycle. However, the current political uncertainty does mean that investors may wish to diversify globally and be selective.

James Mulford, Head of UBS Global Mandates & Investment Content (UK & Jersey), suggests that investors could adopt the Liquidity, Longevity, Legacy (3Ls) approach to wealth management to help prepare for volatility.  

Michael Clarke, Head of Private Clients at UBS Wealth Management in Jersey, explains that his team is in an optimal position to support wealth management. “Our local expertise, combined with the global strength of UBS, provides clients with an unrivalled wealth management experience,” he says.

“We take time to understand what is really important to our clients and provide intelligent solutions, and this level of experience and care puts us in an ideal position to provide invaluable support during these more volatile times. 

“The knowledge of our client advisors, matched with a well thought out wealth management plan, can make a real difference.” 

Pictured (l-r): Dean Turner, Caroline Simmons, Michael Clarke, James Mulford, Thomas Raines

For more about UBS Jersey’s services, contact Michael Clarke, Head of Private Clients, UBS AG, Jersey Branch, 1 IFC, St Helier, Jersey JE2 3BX Tel: 01534 701148 Email: michael.clarke@ubs.com 

• This advertising feature was first published in the March/April edition of Businesslife magazine.

© UBS AG, Jersey Branch is authorised and regulated by the Jersey Financial Services Commission for the conduct of banking, funds and investment business. UBS AG, Jersey Branch is a branch of UBS AG (a public company limited by shares, incorporated in Switzerland whose registered offices are at Aeschenvorstadt 1, CH-4051, Basel and Bahnhofstrasse 45, CH-8001 Zurich) with its principal place of business at 1 IFC, St Helier, Jersey JE2 3BX. Terms and Conditions are available upon request. © UBS 2019. All rights reserved.