Amundi Research A multifaceted and a client-oriented business line - April 2019
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April 2019 Amundi Research A multifaceted and a client-oriented business line
Being a trusted
partner,
means being a responsible
partner.
© Getty Images
Preparing for tomorrow means integrating financial and sustainability
criteria for a lasting performance. Since it was founded, Amundi
has taken ESG themes – Environment, Social, Governance – into
consideration and been a pioneer of Socially Responsible Investment.
Now, European leader(1) Amundi is committed to going further:
by 2021, it aims to apply ESG criteria in 100% of its ratings,
investments process and voting policy.
_
amundi.com
#ResponsiblePartner #Ambition2021
For professional clients only: (1) Source: IPE “Top 400 asset managers” published in June 2018 and based on AUM as of end
December 2017. In the UK, this promotion is issued by Amundi Asset Management London Branch, 41 Lothbury, London, EC2R 7HF.
This document is not intended for any citizens or residents of the United States of America or any “U.S. Person” as defined by
“Regulation S” of under the US Securities Act of 1933. Amundi Asset Management (“Amundi AM”) is a portfolio management
company authorised by the Autorité des Marchés Financiers in France under number GP-04000036 and subject to limited
regulation by the Financial Conduct Authority (the “FCA”) for the conduct of investment business in the United Kingdom.
Amundi AM is entered on the FCA Register under number 401883. The content of this advertisement is for information
purposes only and does not constitute a recommendation to buy or sell. amundi.com. March 2019. |Amundi Research: a multifaceted
and a client-oriented business-line
Amundi has developed a platform of research services covering all
aspects of investment research supporting domestic and international
investment teams (our internal clients), and servicing all types of –
external – clients: corporates, pension funds, insurance companies,
central banks and Sovereign Wealth Funds, retail clients, banking
networks, external distributors… This research platform boasts
more than 150 international experts, disseminated within portfolio
management business lines (embedded research) and within the
central research team.
Amundi Research: A multifaceted and a client-oriented business line 3Five main strengths
C
onviction-based, relevant research that seeks to provide macroeconomic
analysis, financial forecasts, cross asset investment strategies as well as
country and sector allocation. Our aim: provide relevant insight on the new
challenges faced by our clients. To have views and convictions is our DNA:
macroeconomic scenario, financial forecasts, strategies, long-term returns,
country and sector allocation, top picks, both top-down and bottom-up
research, macro-hedging proposals are an integral part of our duties.
C
omplementary & multidisciplinary teams comprised of economists,
strategists, quants, credit analysts, equity analysts & SRI / ESG analysts.
Such an array of experts enables us to provide quantitative & qualitative
research covering a wide range of areas. These teams contribute on
advisory activities, partnerships with universities, training programmes...
A
complete integration of research into investment processes through
systematic portfolio reviews with asset managers, and, in some segments,
through the necessity of a positive recommendation from dedicated
analysts before any investment.
A wide range of publications spanning weekly, monthly and event-driven
macroeconomic overviews to in-depth thematic research (Discussion
Papers) and academic publications (Working Papers).
B espoke research as part of our DNA: apart from regular publications,
Amundi prepares numerous tailor-made and confidential pieces of
research to answer clients’ specific requests.
4 Amundi Research: A multifaceted and a client-oriented business lineResearch teams, at the heart
of investment management
Amundi’s research teams work closely with in-house fund management
teams & advisory services contributing to portfolio reviews, sector reviews,
internal rating, target prices. As part of Amundi’s investment committees,
the teams play a key role in portfolio construction & optimisation, asset
allocation and relative value trades.
The Hub concept facilitates interaction among the providers of expertise,
between providers and fund managers, and with the rest of Amundi.
The research teams work actively on advisory projects for major clients
on investment processes and portfolio monitoring. Different sets of
expertise have been developed in the past years: the volatility expertise,
the SRI expertise, the smart beta expertise, the low carbon expertise, the
factor investing solutions, the Alternative Risk Premia solutions, overlay
solutions…
Amundi Research: A multifaceted and a client-oriented business line 5Amundi research: a cross asset
and multi-faceted business line
E
conomic research: provides economic scenarios and forecasts, analysis of
long term risks and thematic research...
S
trategy research: provides forecasts and expected returns, sets out a
fundamental and systematic approach to markets using in house tools,
provides country and sector allocation ideas and strategies on the major
asset classes...
Q
uantitative research (Investment Process Research): provides
quantitative tools for fixed income, equity & multi-asset portfolios
management; participates / generates new investment process or funds;
provides a methodological backbone to investment teams, academic
research…
E
quity research: provides an active input (bottom up analysis, sector
analysis) into Equity investment processes, internal ratings, relative value
trades…
C
redit research: a dedicated team in charge of reviewing the primary and
secondary markets, as well as to provide issuer analysis reports to fund
managers, internal ratings, relative value trades…
S
ocially Responsible Investment research: the SRI research integrates
ESG criteria (Environmental, Social and Governance) in the evaluation
of companies, provides internal rating on equities and bonds. This
research also develops tailor-made solutions for clients and, as members
of domestic and European institutions, (including regulators), they
participate actively to debates on topics related to SRI, ESG, impact
investing, governance, engagement...
P
artnerships with universities: amongst the current / past academic
partners, Toulouse School of Economics (with the Nobel Prize Jean Tirole),
Columbia University (with the Nobel Prize Joseph E. Stiglitz), ESSEC
Business School, Singapore Management University, Dauphine University
Paris… these partnerships are usually developed through academic
chairs or foundations. The target is to develop our networking, to publish
academic research, to organise conferences...
T
raining to clients activities: in-house training programmes, ad hoc
training for partners and key clients.
6 Amundi Research: A multifaceted and a client-oriented business lineCross Asset Line
Monthly Letter
Monthly Finalised at
01 Februar y 2019 February 2019 # 02
CROSS ASSET
INVESTMENT STRATEGY
This publication documents the outlooks, macroeconomic and
financial forecasts, risk factors, strategies and asset allocation
KICK-OFF 2019 WITH COURAGE
AND DISCIPLINE
CIO VIEWS
of Amundi, covering equities, debt, real assets and diversified
portfolios. It also reports on the outcomes and topics of discussion
THIS MONTH’S TOPIC
DEMAND SUPPORTS ITALIAN DEBT
ISSUANCE AS PRIMARY MARKETS
MOVE INTO THE SPOTLIGHT
from Amundi’s investment committee. One topic is given special
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
coverage in this monthly publication (this month’s topic).
Outlook
Two publications present our 2/3 years
views.
he global macro views, released
T Monthly Finalised at
9 November 2018 November 2018 # 11
in November, present all scenarios CROSS ASSET
for the coming three years and INVESTMENT STRATEGY
macroeconomic forecasts. Central
scenario and alternate scenarios are Thematic paper I CROSS ASSET Investment Strategy
developed. Some inserts focus on
Global Macro
specific risks or countries. Outlook to 2020
he cross asset investment strategy –
T 2019
special edition, released in November, Outlook
gives details on asset classes and
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
SPECIAL ISSUE
asset allocation perspectives. With a
recap of our macro views, risk factors
and investment strategies are also
developed.
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
Working Papers
These are research documents intended for
presentation at academic conferences and for
publishing in theoretical and empirical research
journals. The topics are always related to asset
classes and asset management, including long-
term issues, portfolio construction, and issues
directly related to the activities of our customer
segments and particular methodologies. Recent
topics of publication have included asset and
Working Paper I Cross asset Investment Strategy
WP-80-2019
liability management, pension funds, ESG,
Financial Applications SMART benchmarking, strategies asset allocation
of Gaussian Processes
and Bayesian Optimization and inflation-indexed bonds, risk premia, factor
investing. More than 50 papers have been
published in academic journals.
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
Amundi Research: A multifaceted and a client-oriented business line 7 Discussion Papers
These do not cover the in-depth issues
dealt with in the Thematic papers,
nor do they share the academic angle
of the Working Papers. Rather, they
offer an in-depth analysis on structural
themes with long-term implications
and consequences on asset allocation
decisions.
Discussion Paper I CROSS ASSET Investment Strategy
DP-36-2018
How ESG Investing
Has Impacted the Asset Pricing
SRI
in the Equity Market Discussion Paper I CROSS ASSET Investment Strategy Discussion Paper I CROSS ASSET Investment Strategy
DP-34-2018 DP-35-2018
The living wage: towards better Global Trade War: Where Do we
industry practices Stand Now? What Impacts?
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
Thematic Papers
These reports, published intermittently, deal with topics that are of current interest.
They cover issues from a range of areas, including economics, politics fixed-income
markets, equities, credit, foreign exchange markets and asset allocation.
Thematic paper I CROSS ASSET Investment Strategy Thematic paper I CROSS ASSET Investment Strategy
November 2018 October 2018
Morocco: Corporate earnings in 2019:
moderate economic risks A fading momentum is in store!
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
Thematic paper I CROSS ASSET Investment Strategy
January 2019
Is Turkey really out of the woods?
Thematic paper I CROSS ASSET Investment Strategy Thematic paper I CROSS ASSET Investment Strategy
July 2018
September 2018
Pacte Law :
French pension reform: a Trojan horse
What changes lie ahead for savings
for a better control of the State budget?
in France?
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
8 Amundi Research: A multifaceted and a client-oriented business liney Investment Strategy
s
Collected Research Papers
2016 Edition
undi
Investment Strategy
Investment Strategy
Collected Research Papers
Editors: Pascal BLANQUÉ & Philippe ITHURBIDE
s first in Europe1 and ninth worldwide1 in the About Amundi
Investment Strategy
Investment Strategy
Collected Research Papers
Editors: Pascal BLANQUÉ & Philippe ITHURBIDE
Collected Research Papers
ement industry with AUM of over €800 billion
Amundi is the N°1 European Asset Manager and in the Top
e heart of the main investment regions in more
tries, Amundi offers a comprehensive range of
ering all asset classes and major currencies.
10 worldwide1 with AUM of close to €1,000 billion worldwide2.
Located at the heart of the main investment regions in more 2014 Edition Collected Research Papers
than 30 countries, Amundi offers a comprehensive range of
developed savings solutions to meet the needs Editors:
products covering all asset classes and major Pascal BLANQUÉ & Philippe ITHURBIDE
currencies.
2016 Edition
100 million retail clients worldwide and designs
gh-performing products for institutional clients
Amundi has developed savings solutions to meet the needs
of more than 100 million retail clients worldwide and designs
ored specifically to their requirements and risk
innovative, high-performing products for institutional clients
Editors: Pascal BLANQUÉ & Philippe ITHURBIDE
ntributes to funding the economy by orienting which are tailored specifically to their requirements and risk
ds company development. profile.
become a leading European player in asset The Group contributes to funding the economy by orienting
recognised for: savings towards company development. J U N E 2 9 T H & 3 0 T H 2 01 7
performance and transparency; Amundi has become a leading European player in asset
client relationships based on a long-term
management, recognised for:
approach;
in its organisation and teams’ promise to - Product performance and transparency; DISRUPTIVE
s clients;
ent to sustainable development and socially
- Quality of client relationships based on a long-term TRENDS
ble investment policies. advisory approach;
- Efficiency in its organisation and teams’ promise Exploring New
to serving its clients;
Opportunities
p 400 asset managers active in the European marketplace” - Commitment to sustainable development and socially
ne 2013, based on figures as at December 2012. Interviews
nagement companies on their assets as at end-December responsible investment policies.
d funds, dedicated funds, mandates).
figures as of 31 March 2014.
1. N°1 European asset manager based on global assets under management
(AUM) and the main headquarters being based in Europe – Source IPE
“Top 400 asset managers” published in June 2015 and based on AUM as
of December 2014.
2. Amundi figures as of 31 December 2015.
ndi.com
Investment Strategy For professional investors only
Collected Research Papers
2017 Edition
01/07/14 08:56
research-center.amundi.com
2016 J U N E 2 8 T H & 2 9 T H 2 01 8
For professional investors only
L O N G -T E R M T H I N K I N G
B E YO N D
2016_couv_328_210.indd 2 09/05/16 12:18
S H O R T-T E R M C O N S T R A I N T S
MIND THE GAP!
About Amundi
Investment Strategy
Investment Strategy
Collected Research Papers
Editors: Pascal BLANQUÉ & Philippe ITHURBIDE
Publicly traded since November 2015, Amundi is the
largest European Asset Manager in terms of AUM (*),
with over €1.1 trillion worldwide. Headquartered in Paris, Collected Research Papers
France, Amundi has seven investment hubs located in the
Investment Strategy
Investment Strategy
Collected Research Papers
Editors: Pascal BLANQUÉ & Philippe ITHURBIDE
world’s key financial centres, and offers a combination of
in the Top 10 worldwide
research depth and market experience that has earned the
2017 Edition
Collected Research Papers
1
with AUM of more than
confidence of its clients.
Editors: Pascal BLANQUÉ & Philippe ITHURBIDE
vestment regions in more Amundi is the trusted partner of 100 million retail clients,
comprehensive range of 1,000 institutional clients and 1,000 distributors in more 2015 Edition
and major currencies. than 30 countries, and designs innovative, high-performing
utions to meet the needs products and services for these types Editors:
of clients tailored
Pascal BLANQUÉ & Philippe ITHURBIDE
s worldwide and designs specifically to their needs and risk profile. Investment cycles
ts for institutional clients
eir requirements and risk Go to amundi.com for more information or to find an and asset allocation
Amundi office near you.
he economy by orienting
ment.
Amundi figures as of 31 March 2017
uropean player in asset (*) N o.1 European asset manager based on global assets under management
(AUM) and the main headquarters being based in Continental Europe -
Source IPE “Top 400 asset managers” published in June 2016 and based on
Investment cycles
sparency;
Investment cycles and asset allocation
Éric Mijot, Strategy and Economic Research - Head of Strategy
AUM as at December 2015.
ased on a long-term
In the European Union, this document is only for the attention of “Professional” investors as defined in
nd teams’ promise to Directive 2004/39/EC dated 21 April 2004 on markets in financial instruments (“MIFID”), to investment
and asset allocation
services providers and any other professional of the financial industry, and as the case may be in
velopment and socially each local regulations and, as far as the offering in Switzerland is concerned, a “Qualified Investor”
within the meaning of the provisions of the Swiss Collective Investment Schemes Act of 23 June 2006
s.
(CISA), the Swiss Collective Investment Schemes Ordinance of 22 November 2006 (CISO) and the
FINMA’s Circular 08/8 on Public Advertising under the Collective Investment Schemes legislation of
20 November 2008. Under no circumstances may this material be distributed in the European Union Éric Mijot, Strategy and Economic Research
sed on total assets under to non “Professional” investors as defined in the MIFID or in each local regulation, or in Switzerland Head of Strategy
0 asset managers” published in to investors who do not comply with the definition of “qualified investors” as defined in the applicable
mber 2013, all AUM having been legislation and regulation.
alth Management activities and
lding company outside Europe. Investment Strategy This document neither constitutes an offer to buy nor a solicitation to sell a product, and shall not be
considered as an unlawful solicitation or an investment advice.
15.
Collected Research Papers The portfolios mentioned in this document, Amundi Diversification, Amundi Risk Parity and Amundi
Minimum Variance, are back test portfolios given for illustrative purposes only.
2019 research-center.amundi.com
Edition 2017 Past performance and simulations shown in this document do not guarantee future results, nor are
they reliable indicators of future performance.
Amundi accepts no liability whatsoever, whether direct or indirect, that may arise from the use Forofprofessional investors only
information contained in this material. Amundi can in no way be held responsible for any decision or
2015 investment made on the basis of information contained in this material. The information contained
in this document is disclosed to you on a confidential basis and shall not be copied, reproduced,
For professional investors only
2017_couv_328_210.indd 2 modified, translated or distributed without the prior written approval of Amundi, to any third person 29/05/17 15:05
or entity in any country or jurisdiction which would subject Amundi or any of “the Funds”, to any
registration requirements within these jurisdictions or where it might be considered as unlawful.
06/05/15 17:55 Accordingly, this material is for distribution solely in jurisdictions where permitted and to persons who
may receive it without breaching applicable legal or regulatory requirements.
The information contained in this document is deemed accurate as at the date of publication set out
on the first page of this document. Data, opinions and estimates may be changed without notice.
Document issued by Amundi, a société anonyme with a share capital of €746,262,615 - Portfolio
manager regulated by the AMF under number GP04000036 – Head office: 90 boulevard Pasteur –
75015 Paris – France – 437 574 452 RCS Paris www.amundi.com
Photo credit: iStock by Getty Images - Signature.
About Amundi
Investment Strategy Investment Strategy
Investment Strategy
Collected Research Papers
Editors: Pascal BLANQUÉ & Philippe ITHURBIDE
Investment Strategy
Collected Research Papers
Editors: Pascal BLANQUÉ & Philippe ITHURBIDE
ager by assets under
globally. Thanks to the
Amundi is Europe’s largest asset manager by assets under
t now manages more management and ranks in the top 101 globally. It manages more Collected Research Papers
s six main investment
ope, Asia-Pacific, the
than 1.470 trillion2 euros of assets across six main investment Collected Research Papers
hubs3. Amundi offers its clients in Europe, Asia-Pacific, the 2018 Edition
h of market expertise
Middle East and the Americas a wealth of market expertise
s the active, passive
and a full range of capabilities across the active,
Editors:passive
Pascaland
research-center.amundi.com
BLANQUÉ & Philippe ITHURBIDE
2019 Edition
rses. Headquartered
For professional investors only
2015, Amundi is the real assets investment universes. Clients also have access to a
capitalization4. complete set of services and tools. Headquartered in Paris, and Editors: Pascal BLANQUÉ & Philippe ITHURBIDE
Couv VA.indd 1 15/05/2017 10:38:54
ased scope and size, listed since November 2015, Amundi is the 1st asset manager in
nd enhanced services Europe by market capitalization4.
its unique research
4 700 team members Thanks to its unique research capabilities and the skills of
ries, Amundi provides close to 4,500 team members and market experts based in
ents with innovative 37 countries, Amundi provides retail, institutional and corporate
ailored to their needs,
clients with innovative investment strategies and solutions
tailored to their needs, targeted outcomes and risk profiles.
.
n or to find an Amundi Amundi. Confidence must be earned.
Visit amundi.com for more information or to find an Amundi
office near you.
d in June 2017 and based
Follow us on
n, Paris and Tokyo
2018
2018 1
Source IPE “Top 400 asset managers” published in June 2018 and based
on AUM as of end December 2017 For professional investors only
2
Amundi figures as of September 30, 2018
3
Investment hubs: Boston, Dublin, London, Milan, Paris and Tokyo
4
Based on market capitalization as of September 30, 2018
research-center.amundi.com
2019 For professional investors only
Collected Research Papers
Amundi Research publishes every year a collected edition of papers, including a
selection of Working Papers and Discussion Papers circulated during the course of
the past twelve months.
This book provides our readers with a full picture of the extent of our diversity. It
is emblematic of what Amundi research can provide, not only on macroeconomic
research, strategy and forecasts, but as well as research on all asset classes.
Amundi Research: A multifaceted and a client-oriented business line 9 Thematic Macro & Strategy
presentation presentation
The research team produces numerous presentations throughout the year, on topics
such as the economic environment, investment strategies or various themes related
to investment processes or long-term trends. These documents are intended for
management teams and external clients.
01 / Execut
ive Trainin Tokyo | February 2019
g Progra
m I Novem
ber 14th ,
2017
Can the build-up of risks derail economic growth?
Asset Al
location, 2019-2020 perspectives and investment strategies
State of th Risk Prem
e Art ia & Fact
or Invest
ing: Philippe Ithurbide | Global Head of Research
er 2018
cat ion :
tloo k & Ass et Allo
Warsaw | Decemb
Madrid | February 2018
Glo bal Ma cro Ou
201 9-2 020
Megatrends and Disruptions Per spe ctiv es for
Consequences for Asset Management Activities
Philippe Ithurbide | Global Head of Research
Reserved for institutional investors
Number of Working Papers published
in academic reviews in the past 9 years 17 | NUM
BER 4
JULY |
2016
(Applied Economics, Bankers Markets
VOLUME
2016
JULY |
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17 | NUM
& Investors, Economic Modelling,
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Appraisin Marielle De
Pascal Blanqué,
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Original Article
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Alternative Investments, Journal of
diversification
and portfolio
On entropy
17 | NUMBER
244
Gianni Pola s
risk premium
of global
An anatomy and Florian Ielpo 264
Ling-Ni Boon
4 | JULY
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Consume 280
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Asset Management, Journal of Banking
Douglas T. to practice
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| 2016
Low-risk Russo 295
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index including
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A fundame Jong and Lauren Stagnol
Marielle de in central
bank reserves Szafarz
diversification ck and Ariane
Kim Oosterlin
Towards greater
Valérie Mignon,
and Finance, Journal of Business Ethics,
Marie Brière,
ndi edition
: Special Amu
Special Issue
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com/jam/
1479-179
ISSN (online) 1470-8272
ve-journals.
Journal of Finance and Risk Perspectives,
ISSN (print)
Ltd.
www.palgra
Publishers
© 2016 Macmillan m/jam/
Copyright e-journals.co
at www.palgrav
is now available
This issue
Journal of Fixed Income, Journal of
International Money and Finance, Journal of Investment Strategies,
Journal of Portfolio Management, Research in International Business
and Finance, Revue Française d’Economie…)
10 Amundi Research: A multifaceted and a client-oriented business lineQ1 2019
Global Asset Class Spotlights
Top Down Quarterly Assessment
Strategy Research Team
Global Asset Class
Spotlights Asset Class Views
Medium and long term
This quarterly publication analyses expected returns
all listed asset classes and present
perspectives, forecasts and investment
strategies. Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
Asset class long-term
expected returns
This document includes Amundi’s view
on asset returns used to build reference
portfolios for our institutional clients.
CIO Insights
Ad hoc document written by the
Amundi CIO on asset allocation and
structural themes.
CIO INSIGHTS
DECEMBER 2017
CIO INSIGHTS | FEBRUARY 2019
Four investing paradigms for
an era of regime shifts
How investors should deal
with the liquidity dilemma
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry.
“ As structural trends take place, different long-
term economic scenarios emerge that will require
investors to rethink their investment strategies. In
this new world, equities could be less risky than
previously thought, Emerging Markets should gain
a relevant role in the core allocation, while bond“
KEY QUESTIONS FOR INVESTORS
1.
2.
What are the disruptive trends currently reshaping the economic landscape?
What could be some possible long-term scenarios for the economy and
financial markets?
3. How should investors rethink their investment strategies?
investing will need to be flexible in the search for
opportunities across the liquidity continuum.
Pascal Blanqué,
Group Chief Investment Officer
Not for Use with US Audience 1
Amundi Research: A multifaceted and a client-oriented business line 11 Investment talks
Ad hoc publication, with input from management teams and research teams on
current topics and market themes, usually in the form of Q & A.
INVESTMENT TALKS
INVESTMENT TALKS
INVESTMENT TALKS
2019 EUROPEAN PARLIAMENT ELECTIONS 5 March 2019 8 March 2019 7 February 2019
Key things to know China more appealing based on progress
European elections: five things to know A dovish ECB, a little relief for the banking
INVESTMENT INSIGHTS INFOGRAPHIC March 2019 and market implications sector in trade negotiations
5 things to know about 2019 EU elections
The next European Parliament elections will take place on 23-26 May 2019 in the Member The European Central Bank (ECB) announced a new series of TLTROs starting in Chinese New Year brings some hopes on the trade front, as some details are emerging on
States of the European Union. Given the current complex political context, these elections September 2019 and changed its forward guidance, with a commitment not to hike progress with the negotiations. We expect some sort of conditional deal to be reached;
1 2 3 4 5 are becoming a sort of referendum on the EU project, and a key political test for many
countries.
rates this year.
Eurozone economy: The ECB revised down its forecasts for inflation and GDP growth in
however, uncertainty regarding the bilateral negotiations is likely to persist, particularly
because at the core of the discussion there are structural issues such as intellectual property
WHEN AND THE EU RELEVANCE OF THE IMPACT OF SMALL ECONOMIC According to the polls, the elections will likely return a more fragmented Parliament, with 2019/2020, signalling that risks remain tilted to the downside. Since December, the protection, and subsidies and SOEs (Stated-Owned Enterprises), which are not likely to be
WHERE PARLIAMENT ELECTIONS BREXIT IMPACT an increased weight of populist parties, although it seems unlikely that we will see a coalition Didier economic outlook has significantly deteriorated. We remain of the view that domestic fully addressed in the short term.
of Eurosceptic forces vs mainstream parties. The two major political forces – the European BOROWSKI demand (and in particular household consumption) will continue to be supported by a Vincent Mortier We believe China does not represent a serious risk to global growth. On the economic
Take place 23-26 The European These elections Potentially fewer We don’t see Didier Head of Macroeconomic front, data are mixed: the slowdown accompanying the transformation of the economy in
People’s Party and the Progressive Alliance of Socialists and Democrats – will likely lose strong labour market performance, strong income growth and the level of monetary policy Group Deputy CIO and
May 2019 in the 27 Parliament is the take place in a members of the significant Borowski Research climbing the value chain and moving away from investments towards consumption is so far
Head of Macroeconomic their current majority. However, these two political forces are still expected to remain the two accommodation. Subsequently, we believe that growth will gradually reaccelerate by Asia ex Japan supervisor
Member States of only directly elected context of tensions European implications from under control. China’s policymakers seem determined to use the cyclical policy supports to
Research largest parties in the EU Parliament and could thus look to include other smaller pro- the end of this year. However, core inflation is expected to remain significantly below
the European institutional body of (internal within the Parliament: 705 the elections, but prevent an economic hard-landing.
European political formations under their umbrella (eg, the Greens). the 2% target and risks remain skewed to the downside, especially in the short run. This
Union (28 if UK EU, with legislative, EU and external members vs the clearly there is a It may take more time than usual to find the right balance between parties and to form fully justifies the dovish stance adopted by the ECB. Regarding monetary policy, there is a clear easing bias, and plenty of margin for further RRR
were to vote) budgetary and related to trade, current 750. In case lot of political noise the European Commission (EC). Therefore, we don’t expect the EC to be fully operational The fixed income view: This next TLTRO was already factored in to some extent by (reserve requirement ratio) cuts, or for benchmark bank rate cuts if necessary. On fiscal
supervisory powers migration, social of a long delay in currently. From an before 2020. We believe that the emergence of a new “anti-populist” coalition may pave bondholders and investors in the euro currency. An additional impact could be policy, there has been a turnaround of the fiscal deficit since Q3 and we expect to see more
which include tensions, etc.) that Brexit, the UK would economic the way for a more pro-European agenda from 2020 onwards. This Commission will have expected depending on how large and/or cheap it turns out to be. In the optimum supportive measures in the future.
approval of the will make them a likely take part to standpoint, the to deal with the 2021-27 Multiannual Financial Framework that is essential for Europe’s scenario, it should benefit the peripheral banks, specifically Italian banks. These potential improvements on the macro side do not seem sufficiently reflected in the
leadership of the sort of referendum the elections. A soft results will not Hervé BOIRAL Chinese equity market, which is discounting a negative scenario and offers quite inexpensive
future. Head of Euro Credit
The equity view: TLTRO III is expected to reduce the risks of a funding cliff and Angelo Corbetta
European on the EU project, Brexit, with a long change economic Isabelle Investment consequences: From a European fixed income perspective, in the short economic contraction for the weaker southern European banks by ensuring that they valuations. Considering the Fed’s dovish stance, the signs of bottoming revisions, and the
Head of Asia Equity
Commission, the and a key political transition period, policies, at least in Vic-Philippe term, an outcome of a softening of European integration could result in an increase in market have access to liquidity on cheap terms, and thereby prevent any unnecessary improved sentiment on emerging markets (EM), we believe that 1H19 could provide good
EU’s executive arm test for many would likely have the short run Head of Euro Govies and uncertainty, leading to a weaker euro currency, market volatility, and an increased focus on deleveraging and credit contraction. However, the terms announced are less helpful than entry points for investors.
countries little impact on the Inflation sovereign spreads. A longer-term perspective will depend on agreement regarding the EU initially expected, and less generous than the last scheme. This measure may give only In our view, the main drivers of the market currently are currency evolution and the
election Commission and the role of pro-Europe parties. partial relief to the banking sector, where valuations are depressed, and significant risk developments in trade negotiations which in turn have an effect on the currency. Equity
From an equity perspective, much of the uncertainty is already priced into European equities, remains, especially on the economic front. market could benefit from a stable/stronger yuan, which we could expect if
except for a no-deal Brexit or a further material deceleration of the EU economy, which is not From a bottom-up perspective, we are cautious on European investment banks as negotiations succeed.
our view currently. We believe the opportunities within European value are the most we believe the business model is structurally challenged. We therefore prefer banks Among Chinese markets, we have a preference for the HSCEI (Hang Seng China
compelling. Kasper with predominantly retail operations, which are in a better position to make better risk- Enterprises Index) which looks even cheaper than the MSCI China, thanks to its higher
Vote projections: A more fragmented Parliament ELMGREEN
Head of Equities
adjusted returns on capital. Given the uncertain outlook, with risks potentially coming Debora Delbò
exposure to financials that performed poorly last year. In terms of fundamentals, the high
return on equity and high dividend yield could provide good value. Regarding stock
from the economic cycle or new litigation risks (e.g., money laundering), we believe Senior Strategist
Current state of the European Parliament – Feb. 2019 Kasper selection, we remain positive on the most domestic-oriented companies, such as internet
investors should give preference to banks with strong solvency levels and the ability to
68 ELMGREEN companies, oil, pharma, consumer staples and property, although in a very selective way for
Head of Equities generate high levels of capital internally.
52 217 the last two sectors. Telecom, utilities, auto remain the least favourite sectors.
The Greens/European Free The main risk in the short term relates to the ongoing weakness in the economic cycle. The
Alliance of Liberals and Democrats for Europe (ALDE) What is your assessment of the Eurozone economy and your reading of the ECB’s
Alliance (EFA) ongoing reporting season (still at its beginning) will be key to assessing how fast the
revision of growth and inflation? deceleration is unfolding.
75 European People's Party (EPP)
49 Since December, the economic outlook for the euro area has significantly deteriorated. There are long-term challenges linked to the extremely high level of debt in the economy
186 Despite a recovery that started well after that of the US, Eurozone (EZ) economies began to
181 European Conservatives and “EU parliamentary and other structural issues. We are sceptical about any dramatic positive outcome in this
Reformists (ECR) slow in H2 2018, much more sharply than other economies. Several transitory factors have
Socialists and Democrats 135 elections will regard in the short term, but would be more constructive in the medium to long term if China
“We expect contributed to the slowdown in EZ growth. For instance, Germany was close to falling into Qinwei Wang could continue to push its structural reforms and openings, as has already been the case.
(S&D) 75 likely be a sort of recession in Q4 due to an abrupt slowdown in world trade, disruptions in the auto sector Senior Economist
referendum on 1.2%/1.5% growth
European United caused by new pollution tests and the weakness of the global manufacturing sector. The
Left/Nordic Green Left
(GUE/NGL)
46
Europe of freedom and direct
democracy (EFDD) the EU project”. in 2019/2020, but
in the short run outlook in Italy has also massively deteriorated, mainly for domestic reasons. We believe the “Some progress in Progress in trade talks, soft landing ongoing
shock on the EZ manufacturing sector at the end of 2018 has been underestimated by most trade negotiations, The recent statements following the bilateral meetings between the US and China suggest that
39 41 risks remain tilted economists, including ECB staff.
47 37 but uncertainty will important progress has been made, and more details are emerging compared to the quiet early
to the downside.” January round. However the uncertainty surrounding the talks remains high, and if no deal is
Others Europe of Nations tend to persist.”
52
705 59 and Freedom (ENF) Along with most economists, we have revised down our GDP growth forecasts for the reached before March 1st, $200bn of Chinese imports will experience tariff increases from 10%
66 Eurozone over the past six months and we now expect 1.2%/1.5% growth in 2019/2020. to 25%. At the core of the discussion, there are structural issues, such as technology transfers
Seats (vs 750)
22 The OECD released on 6 March its interim outlook and is somewhat more pessimistic than and intellectual property protection.
Vote projections at 8 we are with 1.0%/1.2% growth expected for 2019/2020. Unsurprisingly, the ECB also revised China continued to make positive gestures by taking action on some key areas: for example,
Non-attached Members
1 March 2019
Source: Amundi. Data as of 5 March 2019. down its GDP growth forecasts from 1.7%/1.7% for 2019/2020 to 1.1%/1.6%, close to our by further opening its bond rating markets (S&P Global was approved to set up its first rating
The two major political forces – the European People’s Party and the Progressive Alliance of Socialists and
Democrats – will likely lose their current majority. However, these two political forces are still expected to
remain the two largest parties in the EU Parliament and could thus attract other smaller pro-European political
formations that may gain ground (eg, the Greens).
\ 1
1 1
Source: Amundi, European Parliament European Elections 2019 - Report on the developments in the political landscape.
Data as of 1 March 2019.
Date of First Use: 5 March 2019. Devised by: Amundi Investment Insights Unit.
INVESTMENT TALKS
12 March 2019
Brexit: an agreement is now more likely,
but be aware of a no deal risk, not priced in
Developments and scenarios ahead: This is probably the most decisive week for Brexit and
the situation is still rapidly evolving. Last night, Mrs. May and Mr. Juncker announced an
agreement on the most controversial part of the Brexit deal: the Irish border backstop. This
agreement is aimed at getting the U.K. Parliament to accept the Brexit deal previously rejected
in January. May described what was achieved yesterday as "legally binding changes" to the
Didier deal, Juncker instead spoke of assurances and guarantees. Theresa May has failed to get
BOROWSKI what Parliament had asked her; however, she has obtained some assurances (a “legally
Head of Macroeconomic binding” agreement”) that could clearly lead a very significant number of MPs to change their
Research minds and accept the proposed deal. The most controversial part of the witdrawal agreement
(the fact that the Irish backstop was permanent) has been revised to give the UK the technical
opportunity to backtrack later.
What is important now is to see how the hard Brexiteers and the DUP (Northern Ireland
Unionists) will react today ("we will be taking appropriate advice, scrutinising the text line by
line and forming our own judgement," a DUP spokesman said). Even if May convinces the
Brexiteers in her own Party and in the DUP, she still needs to convince the moderates and
Remainer. That’s why, she is also promising to end austerity on the fiscal side if MPs back her
Laurent CROSNIER deal. One of the key point mentioned yesterday by Juncker is that if the UK has not left the
Head of Global Fixed
EU by 23-26 May (the European elections date), it will be legally required to hold these
Income
elections, which is a red line for many MPs (and will thus be perceived as a game changer).
Thus a short-lived extension cannot go beyond this date. By opening the door to a long
period of uncertainty with a possible UK participation in the May European elections,
the EU has given the British prime minister an additional advantage to get her deal
passed by 29 March. Indeed, should the deal be rejected tonight, the agreement reached
yesterday would increase the likelihood of new general elections and/or another
referendum, which de facto increases the likelihood of a deal by March 29. The
concession made yesterday night is the last concession that the EU will make.
Matteo GERMANO At the time of writing, it is likely that the Parliament will likely vote today for a deal presented
Head of Multi-Asset
by May. If that deal were to be rejected there could be another vote on a no deal. And should
the no deal also be rejected, there will likely be a vote on an extension of the Brexit deadline,
which would leave the country with high uncertainty on the next extended deadline.
We still see three scenarios: a deal ratified by March 29 has now become more likely (50%),
followed by “prolonged uncertainty” scenario (30%), with a Brexit deadline extension, and a
no deal scenario (20%).
Investment views: we believe that a deal reached today, will bring relief to financial markets,
taking away a source of significant uncertainty. Also a short extension, could bring some relief,
Tristan PERRIER but uncertainty would be back once the new deadline approaches. On the contrary, a no deal
Senior Economist
is not priced in by the markets and would put pressure on risky assets, European equities and
UK equities, in particular. From a multi asset perspective, we have become more cautious
on risky assets, equities in particular: the year to date rebound for equities has been too fast,
in an enviroment of weak economic data, with earnings being revised down and higher
geopolitical risks (i.e trade) still on the table.
From a fixed income perspective, we have a neutral view on duration, and we see only a
moderate rise in Gilt yields from current levels. The economic slowdown, a benign inflation
outlook and accommodative central banks (at global and domestic levels) exert downward
pressure on bond yields. However, we expect new yield lows (below 1%) only in the case of a
no deal. The GBP is not pricing in a no deal, which would be very negative for the GBP (with
potential loss of a further 10% from current levels). As we are closer to a binary outlook, we
believe investors should remain neutral/slighly positive on Sterling, avoiding taking a strong
directional risk, as the tail risk of a no deal is not priced in at all.
Insights Paper 1
Ad hoc document written by various Amundi teams (Portfolio
management, Cio’s, Investment Insight Unit, Research), on
various topics or markets’ structures themes.
INVESTMENT INSIGHTS BLUE PAPER | MAY 2018
INVESTMENT INSIGHTS BLUE PAPER | MARCH 2019
Rethinking fixed income
investing when the easy Gold in central banks’
money is coming to an end asset allocation
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
INVESTMENT INSIGHTS BLUE PAPER | FALL 2018
European Equity: Combining
value and quality in this new
market phase INVESTMENT INSIGHTS | MARCH 2018
INVESTMENT INSIGHTS BLUE PAPER | AUTUMN 2018
Emerging Markets:
How to unlock the next What lies ahead for the US
wave of returns economy and markets?
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Theory, Algorithms, Applications & Puzzles
J-C. RICHARD — Quantitative Research Eisler Capital, T. RONCALLI —
Head of Quantitative Research — Amundi
Traditional and Alternative Factors in Investment Grade
Working Paper I Cross asset Investment Strategy Corporate Bond Investing
WP-79-2019
Constrained Risk Budgeting
M. BEN SLIMANE — Fixed-Income Quantitative Research, M. DE JONG —
Portfolios
PhD, Head of Fixed-Income Quantitative Research, J-M. DUMAS — Head of
Document for the exclusive attention of professional clients, investment services providers and any other professional of the financial industry
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Manager, T. SEKINE — Deputy Head of Quantitative Research, M. SRB —
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The Alpha and Beta of ESG investing
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in the Equity Market
L. BENNANI, T. LE GUENEDAL, F. LEPETIT, T. SEKINE — Quantitative
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Discussion Paper I CROSS ASSET Investment Strategy
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Amundi Research: A multifaceted and a client-oriented business line 15About Amundi
Amundi is Europe’s largest asset manager by assets under management and ranks
in the top 101 globally. It manages 1.425 trillion2 euros of assets across six main
investment hubs3. Amundi offers its clients in Europe, Asia-Pacific, the Middle
East and the Americas a wealth of market expertise and a full range of capabilities
across the active, passive and real assets investment universes. Clients also have
access to a complete set of services and tools. Headquartered in Paris, Amundi was
listed in November 2015.
Thanks to its unique research capabilities and the skills of close to 4,500 team
members and market experts based in 37 countries, Amundi provides retail,
institutional and corporate clients with innovative investment strategies and
solutions tailored to their needs, targeted outcomes and risk profiles.
Amundi. Confidence must be earned.
Visit amundi.com for more information or to find an Amundi office near you.
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1
S ource IPE “Top 400 asset managers” published in June 2018 and based on AUM as of end
December 2017
2
Amundi figures as of December 31, 2018
3
Investment hubs: Boston, Dublin, London, Milan, Paris and Tokyo
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of €1,086,262,605 - Portfolio manager regulated by the AMF under number GP04000036
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