Investors should look to U.S. and emerging market equities in the year ahead as global growth stabilizes, recommends a new report from UBS AG’s wealth-management division.

The report predicts that global growth will accelerate moderately in 2017 with global real gross domestic product (GDP) growth likely rising to 3.5%, up from 3.1% in 2016, as U.S. growth improves and China continues to slow.

Thus, UBS’s top investment ideas for this economic climate include both U.S. and emerging market equities: “U.S. earnings should grow 8% in 2017, supported by stabilizing oil prices, accommodative monetary policy and potential fiscal stimulus from the Trump administration.”

At the same time, the report suggests that emerging-market equities will be supported by several factors, including low interest rates in developed markets, a softer U.S. dollar, stronger growth and higher commodities prices. UBS also favours emerging-market currencies over growth-sensitive developed market currencies such as the Australian and Canadian dollars and the Swedish krone.

“We believe that central banks in the U.S. and Europe will continue to err on the side of loose monetary policy. This means equities can remain supported, most notably in the U.S. and emerging markets, and that investments with a decent yield will remain sought after,” says Mark Haefele, global chief investment officer with UBS Wealth Management, in a statement. “Investors will also need to consider means of hedging portfolios against rising inflation.”

Alternative asset classes, such as hedge funds and private securities, also feature as one of UBS’s top investments ideas because “Traditional asset class returns are likely to be moderate in 2017.”

Furthermore, UBS recommends selling high-grade bonds: “Yields are negligible and risks are rising. Investors could consider replicating some of the asset class’s insurance features with other approaches, including systematic hedging and allocation strategies.”

Looking beyond 2017, UBS recommends long-term investments in education, energy efficiency, and equity and impact investments in the emerging-market health-care sector.

“In developing nations, spending on health care is far outpacing GDP growth, creating opportunities for companies and impact investors,” the UBS report says, adding that energy efficiency and education are its other top themes for long-term investment.