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UBS has issued new investment guidance for its affluent clientele, suggesting a significant shift in asset allocation strategy. The Swiss financial services firm is advocating for an increase in alternative asset investments to 22%, underscoring a broader trend towards more accessible private market investments.
The firm’s portfolio strategists outlined a restructured investment approach that moves away from conventional models. They recommend a balanced portfolio comprising 30% private markets, with equal allocations in bonds and stocks at 30% and 40%, respectively. This strategy is informed by the potential for higher returns in private assets, which have traditionally outpaced benchmarks like the , thanks to what’s known as the illiquidity premium.
This new strategic directive comes as UBS taps into the growing democratization of private market investing, which now offers improved liquidity options. By adjusting their portfolios to include a more significant portion of alternative investments, UBS’s clients could potentially benefit from the enhanced performance historically associated with these assets.
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