UBS Says Investors Should Stay in Equities but Broaden Exposure as 2026 Rally Widens

UBS says investors should remain positioned in equities, arguing that the global rally seen at the start of the year is likely to broaden across markets and sectors.

In a note published last week, the bank said the “big picture outlook remains consistent” with its Year Ahead projections, even though some trends have unfolded faster than expected.

The S&P 500 briefly crossed 7,000 in late January, while Chinese and Japanese equities also delivered strong gains.

UBS believes the moves underscore why investors should look beyond point forecasts and instead focus on portfolio construction, rebalancing and diversification.

“We think the magnitude of some of these moves may give many clients a great opportunity to rebalance their allocations,” the bank wrote.

UBS highlighted growing geopolitical uncertainty as a driver of recent volatility, noting that government interventions have widened the range of market outcomes.

The firm argued that “one of the most effective ways of dealing with a broader range of scenarios is to increase asset class and regional diversification.”

On equities specifically, the bank urged investors to expand exposure beyond large U.S. technology names. It said opportunities are widening across sectors such as financials, health care, consumer discretionary and utilities.

UBS added that investors should “take a global perspective” to capture gains across Europe, China, Japan and the United States.

Overall, the bank reiterated that staying invested in stocks while broadening allocations across regions and sectors remains its preferred strategy for navigating 2026’s fast-moving market environment.