Model portfolios – Swiss focus

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Emerging market stocks with attractive buying opportunity

The persistently gloomy economic outlook and restrictive monetary policy are increasingly making themselves felt in the financial markets. Thus, the dynamics on the bond and equity markets have slowed down considerably in the meantime. The US dollar, on the other hand, has recently recovered somewhat. However, this is not yet a turnaround. Since last autumn, the American currency has lost almost 10 percent on a trade-weighted basis. Despite this downward trend, it is still clearly overvalued in our view. Thus, the US dollar has further downside potential. In the past, emerging market assets in particular have benefited from a weak US dollar. With the recent decline in emerging market equities, there is now an attractive buying opportunity. We recommend to slightly increase the weighting of emerging market equities.