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Together with German asset manager DWS, French asset manager Amundi has outlined its mid-year global investment outlook for 2025.
Vincent Mortier, group chief investment officer (CIO) at Amundi, said the name of the
game in 2025 will be diversifying away from the US and into
European and emerging market bonds.
“Government bond markets are rattled by the threat of higher debt
and rising inflation fears, keeping volatility
high. Investors are likely to demand greater compensation
for long-dated bonds, making yields appealing,” Mortier said in a
note.
Amundi said that major economies are displaying resilience but
also diverging paths, with the US expected to slow down, Europe
to post moderate growth and India to stand out.
Amundi estimates global growth at 2.9 per cent and 2.8 per
cent in 2025 and 2026, with GDP growth nearing 1.3 per cent
in developed markets and 3.9 per cent in emerging markets over
the next two years. It estimates 2025 and 2026 GDP growth at
6.6 per cent and 6.4 per cent for India, and at 4.3 per cent and
3.9 per cent for China, respectively.
Differences in growth, inflation, and fiscal trends will drive
divergence, notably in monetary policies.
Mortier favors a flexible approach to diversifying away from
the US across global markets, prefering European and emerging
market government bonds, which could benefit from a good
growth and inflation mix and weaker dollar. He is tactical on
duration. In credit, he favors high-quality credit and
prefers European over US investment grade. He is neutral on high
yield as spreads may rise toward the end of the year. In terms
of sectors, Mortier likes financials and subordinated
credit. Bank subordinated debt could prove one of the most
interesting segments.
Equities
“Despite unpredictable policymaking, business resilience, and new
rerouting trends, the expected rate cuts from central banks will
create opportunities in global equities,” Monica Defend, head of
Amundi Investment Institute, said. “We are focusing on
themes such as European defense spending, US deregulation,
corporate governance reform in Japan, and the Make in
India initiative.”
She believes that rotation will continue away from the US
market and developed market equity should generate low
single-digit returns in the second half of 2025. She favors
global equities with a focus on valuations, solid margins, and
careful sector selection through major themes such as
European defense and infrastructure, AI, US deregulation,
corporate governance reform in Japan and ‘Make in India’.
Defend is positive on European mid-caps, equal-weighted US, and
high dividend equities in Japan. Sector wise, she favors a
mix of cyclicals and defensives and prioritizes domestic and
service-oriented sectors. She prefers financials and
communication services over energy and materials, with utilities
as a hedge.
She also believes that emerging market equities are
well-positioned to benefit from structural shifts in countries
adapting to global economic realignments. The focus is on
resilient and domestic-oriented sectors, defense and IT.
Vincenzo Vedda, global chief investment officer at DWS also highlighted that
sentiment and the situation for emerging market equities has
slightly improved. “This holds particularly true for China –
both, for corporations in general and for consumer-oriented tech
corporations in particular,” Vedda said. However, he thinks that
Indian equities appear to be expensively valued, especially
against the background of comparably weak data, recently released
by many corporations.
Alternatives
Amundi believes that gold and commodities are good hedges against
inflation risks, infrastructure and private debt provide stable
cashflows. With gains of roughly 25 per cent in the current
year, Vedda said that gold is one of the top performers. The
reasons: lasting geopolitical uncertainties, the waning trust in
the dollar, globally rising liquidity and the lasting demand from
central banks. This constellation is expected to stay around. For
this reason, Vedda raised his price target again, forecasting a
price of 3,750 dollars per ounce by June 2026.
In private markets, Amundi said selectivity will be crucial due
to huge capital inflows. Currency diversification is also
crucial, in particular for non-dollar investors.