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.

Amundi is slightly overweight in equities, mainly due to its overweight position in European equities. It is neutral on US equities and overweight in UK equities.  

Defend 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.