Amundi Convictions
What is Amundi Convictions?
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.
The four themes behind the shift from the West to the East
Emerging markets had a challenging 2022, but this year started off on a more favourable note. We have identified four main themes behind the shift from West to East.
Market Returns: What to expect in the next decade
Climate change is the main challenge on top of policymakers’ minds around the world. Even if some global initiatives exist, governments are approaching the problem in an uncoordinated way, leading to what we could define as a “disorderly” transition towards net zero.
Liquidity solutions – the importance of being hedged
Fixed income instruments are typically exposed to interest rate risk. We believe it is important to develop an appropriate hedging strategy aiming to offset the negative impact of sudden rate movements.
Liquidity solutions – balancing diversification, yield and risk control
When it comes to cash management, there is quite a variety of solutions available in the market to choose from. In this article we explain why liquidity solutions could provide an attractive opportunity to investors as they seek to balance different criteria.
Why now might be the time to consider money market funds
The uncertainty in the markets has triggered a flight-to-quality, and investors are now looking at money market funds. Discover why we believe this could be the right moment to consider them.
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.
Income as a source of resilience
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
Amundi, November 2022
Fixed Income
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:
1
Higher yields, as current levels are now attractive, investing in fixed income is paying off.
2
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.
3
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
Amundi, November 2022
Inflation
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.
1 Amundi Global Investment View, August 2022.
Visit our dedicated Inflation page
Research Papers
Portfolio Strategies in Inflationary Times
Inflation is back: read more of Amundi Institute's research
Real Assets in an Inflationary Context
We are shifting towards an environment of low growth and high inflation. Why should investors consider real assets as a potential solution?
War and Net Zero Opportunities across the Commodity Universe
We are each experiencing inflation in both our personal and professional lives. We have been noticing an increase in commodity pricing, but what’s causing these elevated prices?
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?
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Important information
Unless otherwise stated, all information contained in this document is from Amundi Ireland Limited and is as of 22 November 2022. The views expressed in this page should not be relied upon as investment advice, a security or service 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. Amundi Ireland Limited is authorized and regulated by the Central Bank of Ireland.
Date of first use: 22 November 2022
Doc ID: 2915715