UBS: Where to look for investment opportunities outside of the US?
The Zhitong Finance App learned that on August 29, UBS Global Wealth Management's Chief Investment Office released a research report gathering analysts' recent core views. Market uncertainty remains high after a strong rise in global stock markets, and UBS believes market volatility may increase in the next few months. For investors with insufficient stock allocations, UBS suggests gradually increasing exposure, including targeting selected market segments outside of the US. In Asia, UBS is optimistic about the Indian stock market, the Singapore stock market, and the Chinese technology sector; in Europe, UBS favors high-quality stocks and also recommends the “Six Major European Investment Paths” theme.
Detailed explanation of the core ideas:
1 The global stock market has recently shown slight weakness after experiencing a rebound. Stock selection needs to focus on selection
Since April, the global stock market, as measured by the MSCI AC World Index (MSCI AC World), has rebounded by about 28%, driven by the conclusion of multiple US tariff agreements and the passage of the “One Big Beautiful Bill”.
Recently, however, the growth momentum of large technology companies has weakened due to perceived problems of excessive investment and overvaluation, which may trigger increased market uncertainty and volatility.
2 Some European stocks may benefit from long-term trends
Our proposed “Six Paths to European Investment” covers a wide range of companies, including defensive companies that can benefit from increased market volatility, companies that benefit from increased German fiscal spending, and companies that benefit from increased defense spending.
Given that future economic growth is likely to remain sluggish, we prefer high-quality European stocks that meet the following criteria: high profitability, strong return resilience, stable balance sheets, or a sustainable competitive advantage.
We are also optimistic about high-quality Swiss dividend stocks, which can help increase the return level of the portfolio.
3 There are also investment opportunities in the Asian market
We expect China's technology sector to benefit from the continued spread of artificial intelligence applications, improvements in fundamentals from the bottom up, and domestic policy support.
We believe that the relatively closed nature of the Indian economy makes the stock market less sensitive to recent US tariff policies, and it is expected that Indian stock market profits will grow by double digits in the next two years.
We believe that the Singapore stock market is also attractive. The supporting factors include strong local currency trends, high dividend yields, and progress in stock market reforms.
What's new this week
DeepSeek (DeepSeek) has launched its new V3.1 model, which uses an innovative computational processing method and is compatible with chips independently developed by China. We believe this development marks another step in China's autonomous and controllable artificial intelligence.
One-sentence opinion
“Volatility may not only create opportunities in the US market, but also in other markets.”
DID YOU KNOW?
Over the past 35 years, the average annual performance of the MSCI Europe Quality Index (MSCI Europe Quality Index) was 2.0 percentage points higher than the broader MSCI Europe Index (MSCI Europe Index), and the volatility was lower.
In the context of a global economy of about $100 trillion, if we roughly assume that about one-third of tasks can be automated through artificial intelligence, these tasks account for about 50% of the labor value, and AI vendors can capture about 10% of that value — based on this estimate, the annual revenue opportunities in the field of artificial intelligence are about $1.5 trillion.
Investment views
Market volatility is likely to increase in the short term due to uncertainties in the economic, political and technological sectors. However, for investors who want to take advantage of the market correction to increase their exposure to the stock market outside the US, we think there are some selected investment opportunities. In Asia, we are optimistic about the Chinese technology sector, the Singapore stock market, and the Indian stock market; in Europe, we prefer high-quality stocks, high-quality Swiss dividend stocks, and the “Six Major European Investment Paths” theme.