New York's Pandemic Rebound Offers Plenty of Ways to Make Money, UBS Says

(Bloomberg) -- There is light at the end of the Holland Tunnel for investment opportunities in pandemic-hit New York City.

That's the message from UBS Group AG, which noted that real estate investment trusts, exchange-traded funds focused on e-commerce, fintech and smart mobility would be prime ways to play the city's comeback.

“We reject the idea that New York's best days are behind it and instead make a concerted argument that its unique attributes still offer investors an opportunity to benefit from its recovery,” chief investment officer Solita Marcelli and head of fixed income Tom McLoughlin of UBS said in a note.

The UBS pair recommend real estate investment trusts that have a focus on Manhattan, while fintech and e-commerce ETFs are “smart ways to invest in the transformation of the U.S. -- and New York-- economy,” Marcelli and McLoughlin wrote. Private real-estate investments, opportunity-zone funds and the city's taxable and tax-exempt bonds are alternatives to stocks.

Investors fled equities that got the bulk of their revenues from Manhattan amid the coronavirus pandemic, which saw people work from home and move out of the city. Demand for social assistance spiked alongside unemployment, housing uncertainty and financial upheaval. But, despite Covid-19's adverse monetary effects, the “exceptional resilience” of New Yorkers gives UBS strategists confidence in the city's rebound.

“While there is still considerable uncertainty as to when we can return to normal lives, the increasing number of people getting vaccinated and the willingness of federal state and local governments to avoid mass shutdowns should lead to a further opening of all that New York has to offer,” the UBS note said.