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<br /> Panorama<br /> For professional / qualified /<br /> institutional clients and investors only.<br /> Mid-Year 2018 | UBS Asset Management<br /> Opportunities in a maturing cycle<br /> 06 The 12<br /> big pictureKey 16<br /> investment<br /> views<br /> Asset class<br /> views<br /> In this edition of Panorama: Mid-Year,<br /> our senior asset class and allocation<br /> experts assess the potential challeng-<br /> es and opportunities for investors<br /> over coming months.<br /> This edition explores:<br /> – How a maturing US economic cycle<br /> and the prospect of lower returns<br /> and higher volatility may affect<br /> asset class attractiveness<br /> – How rising US interest rates are<br /> changing the game for fixed<br /> income investors, and why it may<br /> pay to be nimble in the coming<br /> months<br /> – Views f<a title="panorama-mid-year-2018 page 1" href="https://secure.viewer.zmags.com/publication/ed628879?page=1"> Panorama </a> <a title="panorama-mid-year-2018 page 2" href="https://secure.viewer.zmags.com/publication/ed628879?page=2"> In this edition of Panorama: Mid-Year, our senior</a> <a title="panorama-mid-year-2018 page 3" href="https://secure.viewer.zmags.com/publication/ed628879?page=3"> Suni Harford Head of Investments Time to thin</a> <a title="panorama-mid-year-2018 page 4" href="https://secure.viewer.zmags.com/publication/ed628879?page=4"> Introduction: Time to think differently </a> <a title="panorama-mid-year-2018 page 5" href="https://secure.viewer.zmags.com/publication/ed628879?page=5"> Perhaps the most significant challenge facing mult</a> <a title="panorama-mid-year-2018 page 6" href="https://secure.viewer.zmags.com/publication/ed628879?page=6"> The big picture: Global macro-economic and tactic</a> <a title="panorama-mid-year-2018 page 7" href="https://secure.viewer.zmags.com/publication/ed628879?page=7"> Overall US unemployment levels are very low in an</a> <a title="panorama-mid-year-2018 page 8" href="https://secure.viewer.zmags.com/publication/ed628879?page=8"> The big picture: Global macro-economic and tactic</a> <a title="panorama-mid-year-2018 page 9" href="https://secure.viewer.zmags.com/publication/ed628879?page=9"> We do not see rising nominal bond yields as a de </a> <a title="panorama-mid-year-2018 page 10" href="https://secure.viewer.zmags.com/publication/ed628879?page=10"> The big picture: Global macro-economic and tactic</a> <a title="panorama-mid-year-2018 page 11" href="https://secure.viewer.zmags.com/publication/ed628879?page=11"> </a> <a title="panorama-mid-year-2018 page 12" href="https://secure.viewer.zmags.com/publication/ed628879?page=12"> Key investment views Changing allocations Q4 2017</a> <a title="panorama-mid-year-2018 page 13" href="https://secure.viewer.zmags.com/publication/ed628879?page=13"> Overall signal = Positive Negative Traditional</a> <a title="panorama-mid-year-2018 page 14" href="https://secure.viewer.zmags.com/publication/ed628879?page=14"> Key investment views Hedge F</a> <a title="panorama-mid-year-2018 page 15" href="https://secure.viewer.zmags.com/publication/ed628879?page=15"> The discretionary trading community has largely b</a> <a title="panorama-mid-year-2018 page 16" href="https://secure.viewer.zmags.com/publication/ed628879?page=16"> Systematic and Index Multifactor investing Meet</a> <a title="panorama-mid-year-2018 page 17" href="https://secure.viewer.zmags.com/publication/ed628879?page=17"> Exhibit 2: Cumulative relative returns of MSCI fa</a> <a title="panorama-mid-year-2018 page 18" href="https://secure.viewer.zmags.com/publication/ed628879?page=18"> Systematic and Index Our pro</a> <a title="panorama-mid-year-2018 page 19" href="https://secure.viewer.zmags.com/publication/ed628879?page=19"> Exhibit 3: Refinement creates return drivers with </a> <a title="panorama-mid-year-2018 page 20" href="https://secure.viewer.zmags.com/publication/ed628879?page=20"> Equities More to go The upcycle is not broken i</a> <a title="panorama-mid-year-2018 page 21" href="https://secure.viewer.zmags.com/publication/ed628879?page=21"> tals both at the macro level via more balanced cu</a> <a title="panorama-mid-year-2018 page 22" href="https://secure.viewer.zmags.com/publication/ed628879?page=22"> Fixed income Changing times Fixed income invest</a> <a title="panorama-mid-year-2018 page 23" href="https://secure.viewer.zmags.com/publication/ed628879?page=23"> markets has remained relatively subdued. As the U</a> <a title="panorama-mid-year-2018 page 24" href="https://secure.viewer.zmags.com/publication/ed628879?page=24"> Securitized investments Securitized assets such a</a> <a title="panorama-mid-year-2018 page 25" href="https://secure.viewer.zmags.com/publication/ed628879?page=25"> Real estate Staying the course Economic fundame</a> <a title="panorama-mid-year-2018 page 26" href="https://secure.viewer.zmags.com/publication/ed628879?page=26"> Infrastructure Private capital required Increas</a> <a title="panorama-mid-year-2018 page 27" href="https://secure.viewer.zmags.com/publication/ed628879?page=27"> Private equity Private equity delivers Strong p</a> <a title="panorama-mid-year-2018 page 28" href="https://secure.viewer.zmags.com/publication/ed628879?page=28"> O’Connor In a sweet spot Record M&A activity he</a> <a title="panorama-mid-year-2018 page 29" href="https://secure.viewer.zmags.com/publication/ed628879?page=29"> So then we turn to the other driver of returns in</a> <a title="panorama-mid-year-2018 page 30" href="https://secure.viewer.zmags.com/publication/ed628879?page=30"> Sustainable and Impact Investing The next front</a> <a title="panorama-mid-year-2018 page 31" href="https://secure.viewer.zmags.com/publication/ed628879?page=31"> financial assessment. While sustainability ratings</a> <a title="panorama-mid-year-2018 page 32" href="https://secure.viewer.zmags.com/publication/ed628879?page=32"> About the authors Bruce Amlicke is Chief Investm</a> <a title="panorama-mid-year-2018 page 33" href="https://secure.viewer.zmags.com/publication/ed628879?page=33"> Matthias Goegele heads the European team of Multi</a> <a title="panorama-mid-year-2018 page 34" href="https://secure.viewer.zmags.com/publication/ed628879?page=34"> About the authors Blake Hilt</a> <a title="panorama-mid-year-2018 page 35" href="https://secure.viewer.zmags.com/publication/ed628879?page=35"> Why UBS Asset Management Drawing on the bre</a> <a title="panorama-mid-year-2018 page 36" href="https://secure.viewer.zmags.com/publication/ed628879?page=36"> For marketing and information purposes by UBS. Fo</a>