Convictions

Dynamic asset allocation when tides are turning

See how a dynamic allocation across asset classes aims to capture market opportunities while managing risks

A coral reef with many colourful fish and part of the sky above water

The current market framework remains uncertain entering into 2024; moving ahead, our analysis indicates an increased probability of a late-cycle phase, which is more supportive for risky assets. On the inflation front, while the most likely scenario is a return towards more normal levels, we see a significant probability of inflation persisting in 2024, requiring allocations to be tilted towards more inflation-resilient businesses.

We favour starting with a conservative allocation including hedges, in a time that might see the 60-40 paradigm coming back; additional diversification* could also be obtained by adding real and alternative assets to enhance long-term risk/return potential, while flexibility, liquidity and risk management could support investors in navigating these short-term tumultuous times.

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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 end of January 2024. 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: 2 February 2024

Doc ID: 3368819

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