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UBS: Markets outperformed in June, led by Quality and Size

Published 02/07/2024, 17:30
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UBS reported in a note this week that there were positive returns across global markets in June, with Developed Markets gaining 2.4%. AC Asia ex-Japan led the pack with a 4.2% increase, followed by the US at 3.6%.

Europe lagged behind, experiencing a 1.4% decline, said UBS. In addition, sector performance is said to have varied, with IT leading the surge at 8.9% and Utilities lagging at -4.4%.

Meanwhile, UBS said quality and size factors dominated in June, with High Quality and Size (Large-Cap vs. Small-Cap) strategies achieving the top performances at 5.1% and 4.4%, respectively.

Conversely, they said Low Risk styles, particularly Low Beta, underperformed significantly at -4.9% on a long-short basis. Value styles also mostly disappointed, with Composite Value and Book Yield delivering the weakest returns.

While acknowledging a slight valuation premium compared to historical PE ratios across developed markets, particularly in the US, UBS highlights the IT sector as the most expensive and Energy as the cheapest.

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