Shock tactics

A new year and a new decade approach, yet at first glance the major challenges to investors look set to remain unerringly familiar. A crystal ball for predicting the course of 2020 would be top of the wish list, but amid a maturing demand cycle and heightened geopolitical risks, there is increasing potential for major events that could disrupt markets.

In our latest infographic, 'Are you prepared? Unexpected outcomes, potential opportunities' we highlight how investors should consider positioning themselves against some potential unexpected events. Our investment experts across asset classes also give their views on the outlook for 2020 to provide some clarity in what continues to be a clouded market.

In our featured video, Barry Gill give his views on whether 2020 will see a recession and discusses why investors may need to rethink their alternative asset return expectations.

As detailed by Evan Brown, Dan Heron and Ryan Primmer of our Investment Solutions team, our macroeconomic base case is for a modest bounce in global demand growth into 2020. We expect global yield curves to steepen relative to current flat levels, but do not expect any material shift away from the broader low policy rates/low yield environment.

The outlook for China is likely to remain a key concern for investors and Bin Shi, Head of China Equities, provides some strikingly simple but powerful advice in his five step plan for 2020. Adolfo Oliete, Head of Asia-Pacific Investments, UBS Hedge Fund Solutions, takes up a similar theme in focusing on the huge opportunity for alpha generation in inefficient Asian equity markets.

In a low/negative yield environment, we also believe that investors will continue to embrace alternatives in a continuing quest for improved risk-adjusted returns. Paul Guest, lead Real Estate Strategist, argues that real asset capital values remain supported by both technical and fundamental factors.

Meanwhile, with a number of potential market risks on the horizon for 2020, Markus Benzler, Head Multi-Managers Private Equity, Real Estate & Private Markets, and Andrew Craighead, Head of Hedge Fund Specialists, UBS Hedge Fund Solutions, examine how private equity and private credit will fare in this environment.

Finally, as we focus on delivering the best possible experiences and outcomes for our clients, to call Sustainability issues an investment 'theme' feels wholly inadequate. It is an imperative. Michael Baldinger, Head of Sustainable and Impact Investing, argues that institutional investor coalitions, active voting and stewardship can and must play an influential role in pressuring corporates to transition to lower-carbon business models.

With insights across both traditional and alternative asset classes, we trust you will find our year-end edition of Panorama thought-provoking and helpful in meeting the investment challenges that lie ahead.