How Can Investors Diversify Their Equity Holdings

UBS maintains a positive medium-term outlook for equities driven by earnings growth but advises investors to broaden exposure across sectors and regions to address market concentration.

Key Takeaways

• 1.The medium-term outlook for equity markets remains positive, supported by strong corporate earnings and a healthy macroeconomic backdrop.
• 2.Investors should diversify portfolios beyond US megacaps into broader sectors and international regions to manage high market concentration and macro uncertainty.
• 3.Rebalancing concentrated AI/tech positions is recommended, utilizing structured investments for capital preservation.

Table of Contents

• Key message
• 01 We believe the medium-term outlook for equities is positive.
• 02 But we expect future gains to come from a broader range of sectors and regions, beyond the US megacaps.
• 03 We believe investors should take steps to rebalance concentrated positions.
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