Hedge Market Risks

UBS recommends that investors use current record-high equity levels and low volatility to add hedges, such as quality bonds and capital preservation strategies, to protect against potential geopolitical and macroeconomic shocks.

Key Takeaways

• 1.Diversification across regions, sectors, and asset classes remains the most effective long-term hedge against market shocks.
• 2.Investors should consider adding government bonds, particularly short- to medium-duration, for portfolio stability and yield locking.
• 3.The current environment of record high equities and low volatility is an ideal time to implement capital preservation strategies.

Table of Contents

• Get asset allocation right, including quality bonds and alternatives
• Substitute direct equity exposure for capital preservation strategies
• Build a liquidity strategy
• Appendix
• Global asset class preferences definitions
• Risk information
• Generic investment research – Risk information

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