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Cross Asset Investment Strategy, CIO Views

Records, surprises and opportunities

Pascal Blanqué, Group CIO, Vincent Mortier, Deputy Group CIO
Amundi Asset Management,  January 2020

As we approach the year-end, a look back over the past 12 months reminds us how unconventional this year of records has been. On the upside, equities rallied to historical highs in December and fixed income returns were also strong as bond yields fell. The combination of these trends enabled a traditional 50 bond/50 equity balanced portfolio for European to investors generate 15.5%1 , the best annual performance in the last two decades. However, 2019 also saw some less exciting records on economic and geopolitical fronts – a high world uncertainty index reading (Brexit, Trump impeachment process and trade war escalation). Debt skyrocketed, CO2 emissions rose and social discontent erupted in many countries. Overall, global growth decelerated, inflation failed to reach Central Banks’ (CB) targets and vulnerabilities continued to build. The big disconnect in market performance and a fragile economic environment is partially the result of re-rating of market valuations and the big shift in CB policies. Various forms of monetary accommodation have eased the financial conditions witnessed at the beginning of 2019.

50% MSCI World in EUR 50% Global Aggregate Bond Hedge EUR.

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Amundi Asset Management

Amundi is Europe’s largest asset manager by assets under management and ranks in the top 101 globally. It manages 1,476 billion2 euros of assets across six main investment hubs3.