The Swiss bank expects property, infrastructure, commodities and gold to offer diversification and inflation protection in 2027 as concerns grow over stretched technology valuations and sovereign debt.
UBS has identified what it sees as a stronger case for so-called real assets as investors grow more uneasy about inflated valuations in technology shares and, in some cases, even sovereign debt. The Swiss bank says these more tangible holdings could be particularly attractive in 2027, with real estate, infrastructure and commodities all offering a different kind of exposure from the equity and bond markets that have dominated recent debate.
The appeal, according to UBS, lies partly in the nature of these investments. Property and infrastructure can generate cash flow through rents or usage fees, while commodities derive their value from scarcity and the balance between physical supply and demand. In the bank’s view, that makes them useful not only as a source of returns, but also as a way to diversify portfolios and help preserve purchasing power if inflation remains stubbornly high.
UBS ties its argument to three longer-term investment themes. First is artificial intelligence, which it says is already boosting demand for data centres, power generation and wider energy infrastructure. The bank also points to electrification, energy security and the reshaping of supply chains as forces that should support spending on industrial capacity and infrastructure, potentially benefiting both commodities and infrastructure assets.
The second theme is the health of property markets. UBS says development activity has slowed across many segments, which should limit future supply. It highlights data centres, senior housing, multifamily residential buildings and high-quality offices as areas that appear well placed. With new supply constrained, the bank expects rents and asset prices to find support in a range of sectors.
Gold is the third part of the argument. UBS says the metal has a slightly different role in a portfolio, but could draw support from fiscal uncertainty, geopolitical shocks and inflation concerns. In its analysis, gold works both as a store of value and as a hedge, especially when confidence in financial markets weakens.
The bank also argues that real assets are flexible enough to perform in different market settings. In a base case built around continued investment in AI, power, defence, energy security and supply-chain resilience, UBS believes commodities and infrastructure should do well. If AI lifts productivity more broadly, industrial commodities and infrastructure could benefit further as demand rises for electricity, semiconductors, data centres and industrial capacity. By contrast, if the AI investment cycle were to reverse sharply, cyclical commodities and energy could struggle, while gold may prove more resilient. In a more persistent inflationary environment, UBS says real assets in general could stand out because they tend to hold up better when prices across the economy keep rising.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
