Strengthen your core

18 September 2026, 12:06 UTC Chief Investment Office GWM Investment Research

Strategic: Strengthen your core Strengthen your core Author: Sagar Khandelwal, Strategist, UBS Switzerland AG

• Why? 1) Building a core portfolio allows investors to navigate different market scenarios with confidence, rather than depending on one path for growth and rates. 2) A portfolio broadly diversified across and within asset classes, geographies, and sectors can consistently grow wealth, providing compounded returns. 3) This approach helps maximize the chance of meeting financial goals, allowing investors to pursue other interests or tactical opportunities with greater confidence and avoid locking in losses in downturns. A well-diversified core can support long-term compounding while reducing dependence on individual positions, regions, or market outcomes. Source: Robert Clark_Unsplash

First-time and seasoned investors alike may be finding it hard economies. Up to 30% can go to growth themes like to navigate today’s financial markets. AI, Power and resources, and Longevity. Fixed income— such as government and corporate bonds—can make up On the one hand, stronger-than-expected corporate 15-50% of assets. Aim for a mix that matches currency earnings, especially in the US, Europe, and parts of the AI needs. Alternatives like hedge funds, private markets, and value chain, are buoying equity markets. At the same time, infrastructure can add more diversification and help manage shifting expectations about the US jobs market, inflation, risk. and the Federal Reserve’s interest rate path have injected volatility into assets like government bonds, the US dollar, Second, rebalance. Big market moves can shift and gold. And with elevated tensions remaining in the portfolios away from targets. Rebalancing means trimming Middle East amid the US-Iran conflict, a cloudy outlook for outperformers and adding to underperformers. This can oil and refined product prices is also adding to uncertainty. help lock in gains, control risk, and keep investors on track. Professional managers do this regularly, and individual CIO believes this market environment favors investing rather investors can benefit from the same discipline—especially in than sitting on the sidelines. Looking ahead, we maintain volatile times. a constructive view on markets, and expect global equities to rise by end-2026 but with periodic bouts of volatility, as For investors holding concentrated stock positions, now may investors digest economic, technological, and geopolitical be an opportune time to review how such positions align developments. And high-quality government bond yields with financial plans and make a plan to reallocate in a should fall as growth and inflation decelerate. disciplined way. Approaches can include setting mental rules to reduce positions when certain performance thresholds But with uncertainty favoring flexibility and a need to think are met or at regular intervals. It may be worth looking in terms of market scenarios, we believe it is important to at structured strategies that enable investors to gradually focus on three, key principles to build more robust portfolios reduce their equity holdings, reducing emotional biases for the remainder of 2026 and beyond: and executing sales in a systematic way. Investors can then identity gaps in their asset class, regional, and sector First, maintain a balanced portfolio. A solid core is key allocations and reinvest proceeds into fresh sources of for long-term success. CIO likes putting 30-70% of assets potential yield, growth, or portfolio protection. in stocks, with at least half in US shares and at least 20% in global markets, including Europe and emerging

This report has been prepared by UBS Switzerland AG. Please see important disclaimers and disclosures at the end of the document.

Investors should also be aware of the particular features of their home equity market and seek to correct any biases or concentration risks to diversify their holdings.

The Swiss stock market, for example, has a number of distinctive sector and single-security biases, especially toward health care stocks. By contrast, local exposure to the…