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It may be time to add global exposure to your portfolio.
UBS Global Wealth Management’s Alejo Czerwonko sees upside going abroad despite a surge in coronavirus cases.
“We expect them to be fairly well-handled by health systems worldwide,” the firm’s emerging markets strategist told CNBC’s “Trading Nation” on Tuesday.
Czerwonko is building his bull case on the ultimate success of vaccine and therapy developments.
“This has continued to support risk assets,” he said.
He upgraded global stocks to “most preferred” or overweight from neutral about a week ago, citing unprecedented government policies designed to cushion the pandemic’s impact.
“We’ve seen central banks and governments across the world which have continued to pump massive amounts of monetary and fiscal stimulus into the system,” said Czerwonko.
He speculates virus flare-ups will continue until there’s a vaccine that’s widely available. However, he believes it won’t materially impact the global recovery’s strength.
“We expect the economies to gradually lift restrictions over the summer,” he said. “We do envision a sustained economic recovery starting in the third quarter of this year and the return to more social activity in the first half of 2021.”
Within his coverage area, Czerwonko sees India as the emerging market watch.
“We particularly like India at this moment. Indian equities have been one of the worst performing within Asia this year,” Czerwonko said. “The market should play catch-up on the back of improving high frequency data as the economy reopens.”
Even though India’s benchmark Nifty 50 Index is up 38% over the past three months, it’s still down 14% so far this year.
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