FUNDVIEW-UBS Wealth likes cyclical stocks, corporate bonds

* Likes cyclical stocks in Australia, Asia, North America

* Fundamentals still strong, no panic yet from clients

* Corporate bonds preferred over sovereign debt

By Narayanan Somasundaram and Koh Gui Qing

SYDNEY, May 28 (BestGrowthStock) – Australian investors are selling
global sovereign debt and moving money to blue chip equities
such as miner BHP Billiton (BHP.AX: ) and Accenture (ACN.N: ) amid
the European debt crisis, a senior UBS Wealth official said.

“We will buy equities today, next week and next month and
continue to top up,” said George Boubouras, Head of Investment
Strategy at UBS Wealth in Australia, who has a slight
preference for North American and Asian cyclical stocks.

Cyclicals lean on economic growth and rise quickly when
growth is strong and fall rapidly when it slows. Some examples
are the automobile, technology and resources sector stocks.

Boubouras advices about 26,000 wealthy clients in Australia
with most of them investing at least A$1 million ($850,000)
through a team of more than 100 advisers. UBS is adding up to
10 more to the team this year.

“We are asking clients not to panic. We are showing them
how fundamentals for the companies and the economies broadly
are still strong,” he said adding clients have not resorted to
fire sales but stayed disciplined balancing portfolios.

Global markets fell to multi-month lows as risk aversion
heightened amid the Europe debt crisis though markets have
recovered a bit since governments reassured markets with plans
to contain the crisis.

Boubouras, whose UBS funds have consistently beaten
benchmark index (.AXJO: ) returns over the last five years, said
the uncertainty over the planned Australian resources tax was
an overhang on Australian miners though compelling valuations
made it a case to buy in small doses.

The planned ‘super profit’ tax on miners and the
uncertainty over mining investment plans coupled with harsh
comments by CEOs on the tax, has hurt stocks, put off foreign
investors and hammered the currency.

UBS is advising clients to keep just 5 percent of their
portfolio in cash compared to double that during the global
financial crisis.

Boubouras said he was advising clients to pick top
corporate bonds to ensure a diversified portfolio.

“It has worked before. A well diversified portfolio is the
only defence against high volatility,” he said.


Investing Analysis

(Reporting by Narayanan Somasundaram & Koh Gui Qing; Editing
by Ed Davies)

FUNDVIEW-UBS Wealth likes cyclical stocks, corporate bonds