Consumer disposable income will benefit from falling fuel prices, which will help revenue growth and margins of consumer focused firms, the group said.
"In light of the recent decline in the oil price, we make an adjustment to our regional equity positioning, adding an overweight position in Swiss equities relative to an increased underweight in U.K. equities," said global chief Investment officer of UBS Wealth Management, Mark Haefele in a update to investors late Thursday.
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The position in Swiss equities should be further supported by the impact the declining oil price will have on monetary policy, he said.
Meanwhile, the U.K. market's relatively large exposure to the energy sector means earnings will likely remain under pressure following the 40 percent decline in Brent crude prices in the second half of this year.
However, the bank's wealth management arm, the world's largest with around $2 trillion assets under management, maintains its large overweight allocation to U.S. equities and believes the falling oil price is a "net positive for U.S. equities, on balance."
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"Overall, the declining oil price should prove supportive of our positive stance on risky assets, and equities in particular. While the impact on U.S. high yield credit is mixed, given its high weighting to the energy sector, most companies will remain profitable at current oil prices," Haefele added.