UBS Asset Management is bullish on US equity and bond markets this year, saying President Donald Trump’s pro-business and deregulation policies would lift corporate earnings and support the world’s biggest economy.
“With Trump in office, I expect more noise and volatility with a wider range of outcomes,” Nicole Goldberger, the firm’s head of global portfolio management, said in an interview in Hong Kong late last month. “But it is important not to lose sight of the bigger picture. All of these powerful tailwinds support our bullish stance.”
The New York-based fund manager oversees UBS’s US Growth and Income Strategy, a US$320 million balanced fund whose top equity holdings in December included Apple, Nvidia, Microsoft, Amazon.com and Alphabet. It also held bonds sold by Uniti Group, Fortress Transport and Xerox, among others.
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UBS maintained an overweight position on the information technology and communication services sectors, driven by strong earnings from the “Magnificent Seven” stocks including Meta Platforms and carmaker Tesla. The tech giants gained 51 per cent in the past 12 months, while the S&P 500 Index rose 22 per cent.
Nicole Goldberger, head of global portfolio management at UBS Asset Management. Photo: Leopold Chen alt=Nicole Goldberger, head of global portfolio management at UBS Asset Management. Photo: Leopold Chen>
“When we look back over the last two years, the majority of the returns have been dominated by the ‘Magnificent Seven’,” she said.
Goldberger, who joined UBS in January 2020 after a 16-year career at JPMorgan Asset Management, expects the Federal Reserve to resume its policy easing with two interest-rate cuts later this year. The Fed cut rates three times since September to a range of 4.25 to 4.5 per cent, though it held off easing last month to reassess inflation.
Investors had priced in inflation risks in the run-up to Trump’s January 20 inauguration, she said, improving the risk-reward profile for bond investors. UBS is optimistic the “dislocation” is temporary, and is betting on rate cuts to drive bond prices higher.
Louis Wong, a director at Phillip Capital Management in Hong Kong, said the US equity market would continue to rise this year on tax cuts, helping earnings of S&P 500 members to grow by 15 per cent. The advance, however, would be fraught with fluctuations as Trump’s agenda fuels volatilities.
