Francesco Sandrini, CIO Italy and global head of multi-asset at Amundi, says markets are running ahead of reality. Europe’s largest asset manager remains mildly pro-risk but is increasingly focused on building protection into portfolios, even as equities test record levels.
Global growth holds up, but the cracks are widening. That is the Amundi investment outlook heading into the second half of 2026, and it has shaped a positioning update that balances moderate risk appetite with a more deliberate approach to hedging.
For institutional investors and asset consultants, the firm’s latest investment views offer a useful reference point. Corporate earnings continue to impress, but geopolitical risk lingers uncomfortably in the background.
Record markets, real risks: the case for building protection
Amundi‘s central thesis is not pessimistic. The firm acknowledges strong corporate earnings, the ongoing AI investment narrative, and measured optimism around a possible resolution to the Middle East conflict as legitimate drivers of the current equity rally.
But Sandrini draws a clear distinction between what markets are pricing and what remains genuinely unresolved.
“We believe the risks (geopolitics, US-Iran) that markets are shrugging off remain present,” he says. “Hence, investors should consider increasing protection on US equities and maintain safeguards in Europe.”
This is not a call to reduce risk dramatically. Amundi remains mildly positive on US equities and emerging markets. Latin America stands out, where valuations and growth dynamics continue to attract attention. The message is more nuanced: maintain exposure but hedge it properly.
For wealth managers, this is a timely prompt. Has portfolio protection kept pace with the equity gains of recent months? Particularly in mandates where benchmark-relative risk has drifted higher.
“We remain mildly pro-risk, seizing opportunities created by market moves and a greater need to strengthen hedges.”
What the Amundi investment outlook says about bonds
On the bond side, Amundi’s preferences are reasonably clear. The firm is positive on US duration, reflecting the trajectory of Federal Reserve policy and expectations of rate cuts in coming quarters.
German government bonds and Italian BTPs versus Bunds also feature in the constructive camp. This reflects continued confidence in European sovereign debt, despite divergent growth patterns across the region.
Emerging markets spreads also remain attractive, with Amundi flagging selective opportunities in this segment. The exception is Japanese government bonds.
Negative real rates in Japan and ongoing Bank of Japan interventions to stem yen weakness have created a complex environment for JGB investors.
The BOJ has signalled further rate hikes, with markets pricing in action at the June meeting. But the central bank faces a difficult balancing act. It must contain inflation, which hit 2.8 per cent on core measures in its April forecasts, while supporting an economy exposed to global headwinds.
In European investment-grade credit, Amundi has tactically trimmed its exposure following recent spread tightening but has not abandoned the segment.
Carry remains attractive and corporate fundamentals are solid. The firm says it will look for opportunities to upgrade its stance when valuations become more compelling.
AUD and gold: the currency and commodity play
Two of the more interesting calls in Amundi’s update involve the Australian dollar and gold. Both tell a similar story about the kind of environment the firm thinks investors are navigating.
On currencies, Amundi favours commodity-linked and higher-yielding names, with the AUD among its preferred positions alongside the Norwegian krone. The reasoning is straightforward.
The Reserve Bank of Australia has raised rates twice in 2026, with the cash rate now at 4.10 per cent, reflecting sticky domestic inflation and relatively robust commodity export conditions.
The AUD has climbed more than 10 per cent against the US dollar over the past year, reaching three-year highs near 0.72. For global multi-asset portfolios, it offers an attractive combination of yield and commodity exposure, particularly relevant for institutional portfolios seeking diversification away from traditional developed market currencies.
The yen has been trimmed in relative terms. While Amundi still sees structural appeal in the JPY, particularly against the Swiss franc given policy divergence, negative real rates and near-term depreciation pressure have prompted a more cautious tactical stance.
Recent BOJ interventions indicate the central bank’s intention to cap yen weakness, but the currency remains under pressure while real rates stay negative.
Gold, meanwhile, is positioned as a long-term structural holding rather than a short-term trade.
Central bank demand has been a key pillar: Goldman Sachs estimates sovereign purchases are running at roughly 60 tonnes per month in 2026, with projections pointing higher in the second half of the year.
The World Gold Council puts annual central bank buying on track for 750 to 850 tonnes this year. Geopolitical uncertainty, above-target inflation across most developed markets, and continued diversification away from US dollar assets are all contributing.
Gold has pulled back from its record near US$5,600 reached in January 2026 but remains well supported at current levels.
For asset consultants reviewing strategic asset allocation, the scale of sovereign accumulation underscores gold’s evolving role as a reserve diversifier rather than a purely tactical hedge.
Do not mistake optimism for absence of risk
Amundi’s update is a reminder that moderate risk appetite and active risk management are not contradictory positions. The firm is not turning bearish, but it is being deliberate about how it holds its risk.
The practical read for portfolio managers is to review equity hedges, assess whether currency positioning captures the yield and commodity dynamics on offer in names like the AUD, and treat gold as a structural allocation rather than a reactive one.
Markets have chosen to look past the geopolitical noise. That choice may yet prove correct. But as the Amundi investment outlook makes clear, choosing not to hedge that bet is a separate and more consequential decision.
