© Reuters.
UBS has released new investment guidelines for its wealthy clientele, suggesting a significant change in asset allocation strategy. The Swiss financial services firm advocates an increase in investments in alternative assets to 22%, underscoring a broader trend towards more accessible private market investments.
The firm’s portfolio strategists outlined a restructured investment approach that moves away from conventional models. They recommend a balanced portfolio comprising 30% private markets, with equal allocations to bonds and stocks of 30% and 40%, respectively. This strategy is based on the potential for higher returns from private assets, which have traditionally outperformed benchmark indices such as the , thanks to what is known as the illiquidity premium.
This new strategic directive comes as UBS takes advantage of the growing democratization of private market investing, which now offers better liquidity options. By adjusting their portfolios to include a more significant portion of alternative investments, UBS clients could potentially benefit from the improved performance historically associated with these assets.
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