Explore all the insights from the 26th edition of the Pension Funds Letter. 

We examine how global geopolitical tensions and ongoing disruptions in trade, energy transition, and AI are driving a new regime of persistent volatility. For Europe, these shocks highlight the need to strengthen strategic autonomy, close capability gaps, and secure funding for investment and innovation. 

The issue also explores the structural rethink of Europe’s pension systems as a potential source of long-term capital, before closing with key insights from Amundi’s 2026 Capital Market Assumptions on the risks and opportunities shaping this new era.

Key Points

While the world faces another international geopolitical crisis, the global economy is moving through a structural shift. The many, continued ruptures we are seeing in trade and policy coordination, together with the fragmented approaches to the energy transition and AI deployment, have led to persistent volatility. Volatility has become some embedded in this new regime. Rupture has become the system. 

For Europe, these repeated shocks have left the continent at a strategic crossroads. Economic security has become inseparable from national security.  An urgent need to fill capability gaps, rethink spending and accelerate innovation has been identified. Underlying the challenge of strategic autonomy is the question of funding. How can Europe unlock the investment required to support this ambition? In the first article of this edition, our active fixed income teams lay out the case for European fixed income and the vital role it plays in strengthening European autonomy.

Another area of Europe’s eco-system that is undergoing structural re-evaluation is the European pension system. This shift, driven by demographics and rising pension costs, represents a significant challenge for policymakers. However, it can also be seen as a means of mobilising significant long-term capital to support the European economy. Our second article lays out the different reforms being considered, and why, and looks at the potential implications of these reforms on Europe capital markets and asset allocation. 

Finally, we wrap up with a summary of the main convictions from Amundi’s 2026 Capital Market Assumptions. We explore the forces driving this new regime, the risks at play and what this new system of rupture mean for our macro scenarios and asset class assumptions.

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Read the full article on the Amundi Research center