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UBS Investor Sentiment and ElectionWatch: Politics and US elections temper wealthy investors’ rising optimism

UBSZurich/Basel, 22 July 2020 – Most wealthy investors and business owners globally have said they plan to adjust their portfolios based on who wins the US election, with almost half seeing November’s vote as one of their top concerns, according to the new Investor Sentiment study by UBS, the world’s leading global wealth manager.

According to the study, which polled more than 4,000 wealthy investors and business owners across 14 markets globally in late June and early July, optimism regarding the economy and the stock market rose compared with the same period three months prior, as the effects of COVID-19 eased.

  • Forty-six percent said they were optimistic on the global economy over the next 12 months, up from 40% three months prior
  • Thirty-eight percent were pessimistic, down from 45%
  • Fifty-two percent said they were optimistic on their own region’s economy over the next 12 months, up from 46%
  • Fifty-three percent said they were optimistic on stocks in their own region over the next six months, up from 45%

However, a rising proportion of respondents (46%) globally ranked the US election among their biggest worries, up from 39% three months prior. Additionally, 51% expressed significant concern about their country’s politics, up from 44%.

A closely fought US election could indeed result in a higher degree of market volatility, according to UBS’s most recent ElectionWatch report, which examines the election’s global and regional implications. Nevertheless, the report does not envisage the levels of volatility that accompanied the onset of COVID-19.

Paula Polito, Divisional Vice-Chairman at UBS Global Wealth Management, says: “COVID-19 remains the top investor concern globally, yet there is significant divergence by region on the focus of post-recovery plans. While more Asians and Europeans see an opportunity for a ‘green’ recovery, US investors place more importance on a traditional economic turnaround.“

Solita Marcelli, Chief Investment Officer Americas at UBS Global Wealth Management, says: “The US election will likely present numerous opportunities for investors, as well as some clarity over policy direction in the world’s largest economy. Regardless of the result, the eventual impact on financial markets is likely to be close to neutral, even if they experience some interim volatility.“

Fifty-five percent of respondents said Joe Biden was most likely to win the election, compared with 45% who said Donald Trump. Forty-nine percent of Latin American investors foresaw a Trump victory, the highest proportion globally, while 42% of Swiss investors predicted a Trump win, the lowest share in any region.

Asian investors were most likely to say they would adjust their portfolio based on who wins, with 75% of respondents saying they were planning to do so versus a global average of 61%. Swiss investors were least likely, with only 31% of respondents saying they were planning to do so.

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UBS Switzerland AG
UBS AG is a Swiss global financial services company, incorporated in the Canton of Zurich, and co-headquartered in Zurich and Basel. The company provides wealth management, asset management, and investment banking services for private, corporate, and institutional clients worldwide, and is generally considered to be a bulge bracket bank. In Switzerland, these services are also offered to retail clients. The name UBS was originally an abbreviation for the Union Bank of Switzerland, but it ceased to be a representational abbreviation after the bank's merger with Swiss Bank Corporation in 1998. The company traces its origins to 1856, when the earliest of its predecessor banks was founded.
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