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UBS makes sustainable investments the preferred solution for private clients

UBS, the world's largest wealth manager, on Thursday announced that sustainable investments are now the firm's preferred solution for private clients investing globally amid the Covid-19 pandemic.

Managing US$488 billion in core sustainable assets, the firm said it is the first major global financial institution to make this recommendation.

While traditional investments will remain "most suitable" in some circumstances, UBS believes a 100 per cent sustainable portfolio can deliver similar or potentially higher returns compared to traditional investment portfolios, and offer strong diversification for clients investing globally.

"Covid-19 has put the exclamation point on one of the most important shifts in financial services in a generation," said Tom Naratil, co-president of UBS global wealth management (GWM), in a statement.

"The pandemic has brought the vulnerability and interconnected nature of our societies and industries to the forefront of investors' minds and shown that sustainability considerations cannot be ignored," he added.

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Year to date, major sustainable indices have performed better than traditional equivalents. All of UBS's SI (sustainable investing) investment strategies have seen positive performance this year, and are on track to outperform the firm's traditional strategies, Mario Knoepfel, UBS head of sustainable investing advisory for Asia-Pacific, told The Business Times.

In particular, the firm's flagship 100 per cent sustainable investing cross-asset discretionary mandate has rebounded about 26 per cent since the market selloff earlier this year.

"Not all sustainable investments are created equal," said Mark Haefele, chief investment officer of UBS GWM. "A well-designed sustainable portfolio can adapt to evolving market and economic environments, and help clients weather the kind of volatility that we expect to persist throughout much of the decade ahead."

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