Convictions
Play dynamic asset allocation in a world of anomalies
Discover how multi-asset solutions could improve portfolios’ risk/return potential and diversification.*
Looking at the state of the global economy, Amundi's projections anticipate a favourable overall outlook, with developed market countries advancing at varying paces and China stimulating its economy to counteract structural downturns and tariff risks. From an asset allocation standpoint, this environment remains conducive to risky assets. Concurrently, we are also evaluating inflation-resilient solutions to hedge against potential geopolitical and inflationary risks.
In the United States, economic expansion is stabilising, but Trump’s policies may heighten uncertainties, including the risk of labour supply shortages, inflation growth, tariffs, and fiscal policy. In the Eurozone, we foresee a modest and uneven recovery with downside risks associated with tariffs. Collectively, this outlook allows us to remain optimistic about risky assets while also advocating for a diversified* investment strategy, including hedges to offset potential volatility increases.
From a multi-asset perspective, we maintain our positive view on equities. Nevertheless, we believe it is important to diversify* by regions and styles, identifying opportunities beyond areas currently too expensive. Growth prospects are more pronounced in the United States. Japan and the United Kingdom offer more value-oriented investments. The Eurozone continues to face significant challenges, but much of this risk is already reflected in valuations, which remain attractive compared to the United States. We opt for a neutral stance on global emerging market equities due to the uncertainty surrounding Trump’s policies.
Looking at fixed income, the asset class is expected to play an important role as part of a diversified* portfolio. With rates on a descending trend, bonds are appealing as income generators due to their attractive yields. They also act as a potential buffer against macroeconomic and monetary policy uncertainties. Our preference is for higher quality, while remaining flexible on duration.
In the US, inflation will be a key factor in evaluating the Federal Reserve's trajectory, with policies from the Trump administration potentially impacting future monetary policy actions. We remain optimistic about European investment-grade credit due to robust demand and solid fundamentals. In emerging market debt, the outlook for hard currency debt is favourable, particularly in countries less affected by the new US administration's policies.
Overall, by adopting a cross-asset, diversified* approach, investors should be well positioned to navigate the complexities of the global economic landscape, capitalising on opportunities while mitigating potential risks.
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Diversify* across different axes
* 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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