At Amundi, we understand that it can be difficult to stay on top of everything that is happening in the market. Between geopolitical tension, inflation and rate hikes to name but a few it can be difficult for investors to make the right decisions. That’s why we created Amundi Convictions.
Amundi Convictions is your go to place for the latest information on the economy coupled with our investment views.
Our team at the Amundi Institute is carefully monitoring the markets and the economies we operate in to bring you the latest information. Our investment specialists are using this information to offer the best strategies for portfolio protection.
2023 could bring some light to investors after the storm
As a momentous year draws to a close, we look ahead at 2023 and we believe that some light could be in sight for investors. Read about our key convictions for 2023 in this article.
Keep your seatbelt fastened, we are approaching turbulence ahead
After a summer characterised by a short-lived rebound of risky assets particularly in the US and Europe, divergences in economic growth prospects, inflation and policy responses are now becoming more prominent. Find out more about what awaits us this Autumn.
Investing in Emerging Markets after the great repricing
Global financial markets around the globe are facing a negative environment with rising uncertainty and geopolitical factors adding weight to the outlook. Emerging Markets (EM) have not been spared by these headwinds.
Low interest rates and higher inflation continue to pose an increasing challenge for investors and savers. Moreover, fluctuating markets can trigger uncertainty when investing in shares. Despite this many investors would like to benefit from a diversified1 portfolio across financial markets, while minimising risks.
1Diversification does not guarantee a profit or a loss
Following the “great repricing” of the first half of the year, we are now witnessing a gradual regime shift. Previously, markets and Central Banks were reacting aggressively to inflation and rising rates volatility. As we enter the “stabilisation” phase, markets are now focusing more on growth prospects and less on inflation. The repricing of the rate curve is mostly completed, and yield volatility decreases gradually. Central Banks have now become more hawkish in their fight against high inflation, bringing a deterioration of the growth prospects. Bonds yield are now stabilising again, and we believe could be used as a source of diversification* and protection against recession fears.
Key factors for renewed interest for bonds
Considering the macroeconomic environment, we consider three key factors for the renewed interest for bonds:
Higher yields, as current levels are now attractive, investing in fixed income is paying off.
Macro hedge, as bonds could provide portfolio protection in case of risks of fragmentation in the Eurozone and/or political uncertainty, or a Fed induced recession in the US.
Diversification*, as the negative correlation between bonds and equities may come back in this period of volatility, making bonds more appealing.
Fixed income may now provide interesting entry points. Bonds should be allocated within a diversified portfolio, favouring selection and some particular segments such as core government bonds, keeping flexibility and looking for quality in the credit space.
*Diversification does not guarantee a profit or protect against a loss
Inflation is on everyone’s mind. We experience it each and every day. Whether we are in the supermarket buying groceries or fuelling our car we each see the prices increasing on everyday items.
Inflation is not showing signs of subsiding – activity is slowing but economies are still growing. Central Banks are attempting to curb inflation through rate hikes. Theses hikes may lead to a recession but it could take a while for these rate hikes to effect growth1.
Absolute Return Strategies in an Inflationary Context
As markets grapple with prospect of recession or possible stagflation, investors may wish to consider an absolute return strategy to protect the real value of their capital. What are the potential benefits of absolute return funds?
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of end of September 2022. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.