UBS Loses Investor Confidence as Biggest Fund Manager

UBS AG, the Zurich-based banking giant that manages the most money for the rich, is getting no respect from its shareholders who are beginning to wonder what happened to their investment.

The 145-year-old Swiss icon ranks as Europe's biggest bank by assets, has Aaa-rated debt and oversees $2.8 trillion for clients, the same amount as the U.S. government's annual budget. Until two years ago, UBS avoided the volatile fixed-income securities that drove earnings to records across Wall Street.

The decision to abandon that strategy and invest in mortgages just as the U.S. housing market started to collapse erased 21 percent from UBS's share price in the past 12 months and cost the jobs of Chief Executive Officer Peter Wuffli, his finance chief Clive Standish and investment-banking head Huw Jenkins. The man charged with restoring the bank's performance, 43-year-old Marcel Rohner, must now persuade investors that UBS can combine the less predictable income of an investment bank with the stability of a money manager.

``UBS was always supposed to be stable, and this year the losses are worse than at other banks,'' said Francoise Mensi, who helps manage more than $1.7 billion at Neuchatel, Switzerland- based Banque Bonhote & Cie. and has been selling UBS shares.

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