Discover opportunities in fixed income, as this asset class can offer income generation and portfolio diversification*.
Bright spots in a world of anomalies
Looking at the global economy, the significant disruptions of the past five years have largely been absorbed, with central banks effectively curbing inflation. Amundi's forecasts indicate a favourable outlook. Global price pressures are anticipated to diminish further, enabling major central banks to continue reducing interest rates, albeit at varying speeds. This environment is conducive to risky assets, despite persistent uncertainties coming from geopolitical and macroeconomic factors, as well as unforeseen events.
This scenario has prompted a shift from cash instruments to fixed income, a trend that is expected to persist. Global bonds now offer attractive yields and can serve as buffers against macroeconomic and monetary policy uncertainties, making them appealing for income generation and portfolio diversification.*
In the equities market, we favour a selective approach. Investors should expand their investment universe, capitalising on the broadening market rally and moving away from areas with high valuations. Instead, they should focus on sectors and companies that can benefit from incoming policies and present reasonable valuations.
Emerging markets present a dynamic investment landscape with both opportunities and challenges, particularly given the uncertainties surrounding the new U.S. administration's policies. In fixed income, we have a preference for emerging market hard currency debt but remain selective. In equities, we maintain a neutral stance due to high geopolitical risks. However, current valuations in the region are attractive and may soon offer entry points. We recognise India's role as a key driver of long-term growth, poised to navigate global economic complexities in the coming years.
We believe responsible investing will remain central to the asset management industry. The transition towards clean energy continues, presenting numerous investment opportunities. We believe investors should not be distracted by temporary challenges and should maintain a long-term focus.
Lastly, private markets and hedge funds offer significant diversification* potential and investment opportunities due to easing monetary policies. We are now witnessing a trend towards the “democratisation” of alternatives, with new flexible, innovative products making private markets accessible to clients with limited capital to invest.
Overall, by adopting a diversified* approach, investors should be well-positioned to navigate the complexities of the global economic landscape, capitalising on opportunities while mitigating potential risks.
Explore our key themes
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Discover how multi-asset solutions could improve portfolios’ risk/return potential and diversification.*
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*Diversification does not guarantee a profit or protect against a loss.
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 12 February 2025. 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.
Date of first use: 12 February 2025
Doc ID: 4231005
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