UBS Global Wealth Management (GWM) has launched the UBS Multi Asset Emerging Markets Dynamic Fund.
The fund is designed to capture the full potential of emerging market (EM) assets at a reduced risk through a dedicated three-pillar approach – diversification, active bottom-up security selection, and equity exposure management.
It is available in jurisdictions across Europe and Asia. It is suitable for investors who wish to invest in a globally diversified EM portfolio with various asset classes.
UBS said that although EM assets have struggled since the start of the Covid-19 pandemic, underperforming relative to their developed market counterparts, emerging economies, especially those in Asia, significantly outgrew developed economies over the last decades.
It added several reasons why investors should look at EMs:
- Attractive returns: Faster growth in EMs supports higher potential returns than developed markets;
- Portfolio diversification: EM economies are more important than ever – their share of the global economy accounting for more than half – and should be a key part of a strategic asset allocation; and
- Timing: China’s reopening looks set to provide a boost and makes EMs attractive over a tactical horizon.
Bruno Marxer, head of global investment management at UBS Global Wealth Management, said: “Although emerging markets increased their share of the global market capitalization, they remain underrepresented in global indices and in investor portfolios.
“We think our risk-controlled multi-asset approach can help more conservative investors gain exposure to the higher return potential of EMs, and offer diversification benefits to EM-based investors with comparable returns but significantly lower risk.”
The fund is jointly managed by UBS Asset Management (AM) and UBS GWM. They will act as portfolio manager and investment adviser, respectively.