Equity investors make best returns amid falling interest rates: UBS

Based on free-float market capitalisation in the FTSE All-World index, which spans the investable universe for a global investor, the US market accounts for a staggering 60.5 per cent of total value

Equity market investors make best returns in a falling interest rate regime, wrote analysts at UBS in their yearbook for 2024.

As an asset class, equities, they said, have outperformed bonds, bills, and inflation in all 21 markets for which the yearbook has a continuous history.

Equities have dominated bonds, while bonds have outperformed treasury bills.

“The majority of long-run asset returns are earned during easing cycles. From 1914 to 2023, the US markets were in a rising interest rate mode 45 per cent of the time and in a falling mode 55 per cent of the time. The annualised