UBS Asset Management United States Please confirm you are a US resident to proceed.

UBS US Equity Alpha

Objective

The US Equity Alpha Strategy seeks to outperform its benchmark by 250 to 500 basis points per year, gross of fees, at a similar level of risk over a full market cycle1.

Benchmark

Russell 1000 Index

Investment philosophy

  • Intrinsic value is determined by fundamentals that drive a security's future cash flow.
  • Discrepancies between price and intrinsic value provide undervalued and overvalued opportunities.
  • Seek to generate alpha by taking long or short positions in the undervalued or overvalued stocks, respectively, in which we have the greatest conviction.
  • A truly integrated global approach produces superior research.
  • Leading-edge risk management evaluates both long and short positions in the portfolio construction process.

Investment process

  • Assess and rank stock based on magnitude of price to intrinsic value discrepancy, using fundamental research, including detailed economic, industry, and company analysis.
  • Construct a portfolio which is, on average, 130% long and 30% short.
  • May use pair trades: buying a security that is somewhat underpriced while at the same time shorting a security that is somewhat overpriced, if the two securities trade in a correlated way.
  • Construct and monitor portfolios in line with risk management and client/portfolio guidelines.

    

Equity strategies are primarily subject to all the investment risks associated with stocks. Stocks have shown greater growth potential than other types of securities, but they have also shown greater volatility and risk of loss. Strategies that focus on small- or mid-cap stocks are generally more volatile and subject to greater risk. Strategies that invest in foreign or emerging markets are subject to special risks that are not normally associated with domestic investment, including possible adverse currency fluctuations and political, social and economic risks. There can be no assurance that any strategy will achieve its objective.