UBS Downgrades US Stocks With Policy and Valuations Among Risks

UBS Group AG has downgraded US equities to benchmark in a 100% dedicated equity portfolio — — a neutral weighting — while maintaining its overweight stance on emerging-markets stocks. The bank cited a slew of headwinds to US including low operational leverage versus other regions, downside risks to the dollar, lackluster buyback yield compared to global peers and lofty valuations.

• “In dollar terms, the US has had its biggest drawdown relative to global markets for nearly 15 years,” team led by strategist Andrew Garthwaite says in Feb. 27 note to clients, “in spite of the rise in AI, much stronger ...