Investing in Asia Pacific

Latest edition · September 17, 2026

Investing in apac october 2026 en

UBS CIO argues that despite rising global bond yields and Middle East tensions pushing Brent crude above USD 100/bbl, investors should stay invested in Asian risk assets rather than sitting in cash. Regional earnings expansion, low valuations, and leadership in the global AI supply chain support Asian equities and credit.

Amid a renewed Fed tightening cycle and elevated commodity prices, cash has re-emerged as a competitor for capital. However, UBS advises against retreating to the sidelines, arguing that higher yields driven by resilient economic activity and AI capex remain supportive for Asia. The Chief Investment Office forecasts 72% earnings growth for the MSCI Asia ex-Japan index in 2026, upgrades China A-shares to Attractive (while downgrading China H-shares to Neutral), and maintains preferences for Taiwan, Japan, Singapore, Malaysia, and India. Additionally, Asia investment grade and high yield bonds offer attractive carry and short duration, while CNY, SGD, and gold provide strategic diversification against US dollar concentration.

Key takeaways from the latest edition

• 1.Stay invested in Asian equities, as resilient growth, manufacturing recovery, and AI infrastructure demand support projected MSCI Asia ex-Japan earnings growth of 72% in 2026 and 20% in 2027.
• 2.Upgrade China A-shares to Attractive from Neutral given direct exposure to domestic AI infrastructure and industrial upgrading, while downgrading offshore China H-shares to Neutral.
• 3.Asian fixed income provides defensive carry and low rate sensitivity, with investment grade credit offering mid-5% yields and high yield offering yields above 7% with modest ~3-year duration.

What this series covers

• When cash competes with risk assets
• The Federal Reserve has raised rates. What are the implications for Asian economies, central banks, and currencies?
• MSCI Asia ex-Japan is up ~25% year to date, outperforming global equities. Can Asian equities continue to advance despite higher US yields, and where are the opportunities?
• How can investors balance income, diversification, and long-term growth in a higher-for-longer rate environment?
• Asset allocation
• Messages in focus
• UBS APAC forecasts
• Risk Information

Edition archive

• Investing in apac october 2026 en

  September 17, 2026

• Investing in apac july 2026 en

  June 18, 2026

• Investing in apac june 2026 en

  May 21, 2026