LIVE MARKETS-Seek durable income, phase into equities - UBS CIO

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SEEK DURABLE INCOME, PHASE INTO EQUITIES - UBS CIO

Concern around the U.S.'s trade policy and fiscal outlook has brought volatility back to markets, and Mark Haefele, global wealth management CIO at UBS, is advising clients focus on seeking durable income and phasing into equities.

UBS recently cut their 'attractive' rating on U.S. equities to neutral, a move Haefele warns shouldn't be taken as bearish.

"The recent earnings season has demonstrated the strength in structural AI earnings trends," he writes.

"We expect US stocks to move higher over the next 12 months, and we maintain our sector level Attractive ratings on communications services, information technology, health care, and utilities."

And while he admits there is a risk that bond yields could continue to rise further in the days and weeks ahead in anticipation of higher U.S. fiscal deficits, it actually could present an opportunity for investors to lock in durable portfolio income.

"Our preference remains for medium-tenor USD bonds of around five years, but depending on the market reaction in longer-term yields, additional investment opportunities may emerge in the days ahead."

(Lucy Raitano)

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