Alessia Berardi, head of global macroeconomics and emerging markets strategy at Amundi Investment Institute, recommends that investors stay invested in diversified portfolios to mitigate risks stemming from geopolitical conflicts, tariff uncertainties, and volatile oil prices. Despite these challenges, Amundi is increasing its positioning across various asset classes, advising investors to strengthen portfolio hedges. She maintains a cautious outlook on oil prices, anticipating an average of $80 to $85 a barrel in the near future, partly due to a geopolitical premium.
Berardi suggests that in an environment characterized by high inflation and central banks adopting hawkish stances, a clear integration call is not compelling. Amundi is not constructive on the US market currently, seeing a trend of diversifying out of the US. Instead of focusing on longer-duration positions in anticipation of aggressive interest rate cuts, Amundi favors carry trades, which involve borrowing at low rates to invest in assets with higher potential returns. They like the short-term part of the yield curve in Europe, where carry opportunities exist.
Amundi continues to favor selected emerging market debt due to attractive yields and is less constructive on longer-dated government bonds, preferring the shorter end of the yield curve for income and limited interest-rate risk. On the equity side, Amundi likes emerging markets, Japan, and Europe. They also favor small and medium technology players, utilities, and industrial sectors linked to AI adoption, emphasizing broadening AI exposure across geographies like Europe and India, including power infrastructure, industrials, and software companies. Amundi also highlights that Asian equities, despite strong returns, do not automatically provide diversification from the US market.
