Shifts & Narratives #7 – Opening the Pandora’s box of social risks: Consequences for investors
The Covid-19 crisis can be considered a turning point for social issues: it has put global socio-economic inequalities in the spotlight and made them more concrete than ever before. It has also clearly shown the tragic effects, from an economic and societal perspective, that systemic shocks can have on unequal, non-resilient societies. On the one hand, … Continued
Inequality: what is at stake (2/4) – Pro-Piketty and Anti-Piketty: A review of the literature in 20 topics
No one is disputing that Piketty’s books are ground-breaking, that his research and his team’s research are fundamental, or that their databases and reports are invaluable. Moreover, this research puts economics back in history, which is highly commendable. According to Piketty, the relatively egalitarian world of the “Thirty Glorious Years” following the world war II … Continued
Inequality: what is at stake (1/4) – Globalisation, growth, financial liberalisation and inequality
With the misdeeds of globalisation, the rise in inequalities and the resulting perception of injustice have been subjects that have fuelled many debates for a little over ten years. The theme of inequalities has even come to the centre of many political programs. However, partiality, biases and common beliefs are prevalent. Is globalisation responsible for … Continued
Shifts & Narratives #6 – Technology trends in Asset Management and Saving Industry
These are days to be optimistic if you are an Asset Manager. And this is not just because the industry has been doing well and the fundamentals remain strong going forward. The future looks bright because the same technological forces that are being so disruptive, present an equal number of opportunities for those who are … Continued
Robo-Advising for Small Investors: Evidence from Employee Savings Plans
We study the introduction of robo-advising on a large representative sample of Employees Saving Plans. The robo-advisor proposes a portfolio allocation and alerts investors if their allocation gets too far from the target, while investors remain free to follow or ignore the advices.We find that relative to self-managing, accessing the roboservice increases the amount of … Continued
Shifts & Narratives #5 – A unique crisis that opens the way to multiple regime shifts
The Covid-19 crisis is exceptional in many ways. It is the most serious health crisis since the Spanish flu a century ago. This crisis resulted in an unprecedented contraction of activity in 2020 and in the deepest global recession since World War II. However, this recession has been the shortest and was not accompanied by a … Continued
Shifts & Narratives #4 – In search of a new international order
Profound changes in the international arena are underway. Together the EU, China and the United States are the three largest economies in the world. Whereas, previously, economic and geopolitical issues were treated separately, it is increasingly clear that the United States and China are using their economic power for geopolitical purposes. Such geopolitical leadership has … Continued
Shifts & Narratives #3 – The ‘make it or break it moment’: why investors should care about COP26?
The Conference of the Parties (COP)26 in Glasgow has been hailed as a turning point in the global fight regarding climate change amid a new US administration and a long and strenuous exit from the Covid-19 pandemic. Six years on from the Paris agreement, the objective is clear: limit the temperature rise to 1.5°C above … Continued
Amundi Pension Funds Letter n°11
Unexpected opportunities for pension funds In the wake of the Covid-19 pandemic, a lot of discussion has focused on the worsening of the retirement prospects of savers around the world. Indeed, exceptional policies, such as the possibility of raiding retirement pots in advance and the low interest rate environment supported by dovish monetary policies, could … Continued
Robo-Advising: Less AI and More XAI?
We start by considering some of the key reasons behind the academic and industry interest in robo-advisors. We discuss how robo-advice could potentially address some fundamental problems in investors’ decision making as well as in traditional financial advice. We then move on to some of the ongoing issues regarding the future of roboadvice. Firstly, the … Continued
Shifts & Narratives #2 – Inflation: something deep awakens
One year ago, as the Covid-19 crisis had just begun, wrote about its potential inflation implications from both a cyclical and a structural standpoint. Cyclically, the crisis was already generating a combination of demand and supply shocks that could only increase short-term inflation volatility and sectoral fragmentation. Structurally, we saw its potential to accelerate policy and … Continued
Temperature scores: an innovative tool for ESG fundamental investors
2021 will be a pivotal year to curb climate change. Although global CO2 emissions dropped 7% in 2020 due to the effects of Covid-19-related lockdowns, stronger action will be needed at the upcoming Conference of the Parties (COP) 26 to keep temperature increases below 2°C and towards 1.5°C.1 Achieving the 1.5°C goal will require net zero global emissions … Continued
Shifts & Narratives#1 Do not give up on fundamental valuations
BE PREPARED FOR A REGIME SHIFT Today, most investors are at a loss regarding what to think of the notion of value and valuations and, even most importantly, how to use it in portfolio construction. We are at the start of a sort of crisis in confidence regarding valuations (and therefore also fundamentals, as they … Continued
Do not give up on fundamental valuations
SOMETHING HAS TO GIVE IN A REGIME SHIFT. BE PREPARED, THERE WILL BE OPPORTUNITIES FOR VALUE INVESTORS. THE GREAT DIVERGENCE It’s been one year now since the Covid-19 pandemic disrupted the world. It changed our lives, but financial markets seem to have side-lined this dramatic event as a temporary pullback, which was quickly recovered and … Continued
The Challenge of Inequalities
Amundi has initiated a series of interviews on major themes usually addressed during the Amundi World Investment Forum with renowned speakers. Discover the theme ‘The Challenge of Inequalities’ featuring: Jean-Jacques Barbéris Head of Institutional and Corporate clients Division Amundi David Goodhart British journalist, commentator and author Fiona Reynolds Chief Executive Officer, Principles for Responsible Investment
Brexit
Amundi has initiated a series of interviews on major themes usually addressed during the Amundi World Investment Forum with renowned speakers. Discover the theme ‘Brexit’ featuring: Jean-Jacques Barbéris Head of Institutional and Corporate clients Division Amundi Teresa May Prime Minister of the United Kingdom and Leader of the Conservative Party from 2016 to 2019
Responsible Investing and Stock Allocation
We analyze the portfolio choices of approximately 913,000 active participants in employee saving plans in France. Looking at the cross-section of equity exposure, we find that the inclusion of responsible equity options in the menu of available funds is associated with a 2.1% higher equity allocation by plan participants. Compared to an average equity asset … Continued
Monetary Policy New Frontiers?
Amundi has initiated a series of interviews on major themes usually addressed during the Amundi World Investment Forum with renowned speakers. Discover the second theme ‘Monetary Policy New Frontiers?’ featuring: Pascal BlanquéGroup CIO, Amundi Stephanie KeltonProfessor of Economics and Public Policy, Stony Brook University