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Investment Outlook 2025
Are financial markets favorable?
Earlier this year, in January, Amundi-Acba held its annual forum under the theme Amundi Investment Outlook.
Addressing the topic of investment outlook for 2025, Frederic Pascal, Co-Head of OCIO Solutions at Amundi - who has been presenting global investment trends to the Armenian audience for the third consecutive year.
“Financial markets offer attractive opportunities and create favorable conditions for risk assets, namely global equities, investment-grade bonds, and emerging market bonds. At the same time, we remain highly focused on managing investment risks by carefully analyzing the opportunities and challenges of regional markets,”- with this perspective, the Co-Head of OCIO Solutions of Amundi, started presenting the global investment outlook.
As indicated in Amundi’s assessment, U.S. equities, particularly those of the “Magnificent Seven” technology giants, are overvalued. In terms of returns, the S&P 500 index yielded over 22% in 2024, whereas excluding the largest tech companies, the return was 18%. It is anticipated, that in 2025, stock market growth in the U.S. will extend to other sectors of the economy, supported by expected tax cuts and support for American manufacturers.
In the securities market, investment-grade bonds currently[1] offer a more attractive buying opportunity than high-yield riskier bonds. Even if interest rates rise slightly (e.g., by 0.5%), investment-grade bonds are still expected to generate real profits.
European bank stocks are particularly promising. Their key advantage is that the trade wars between countries affect them less, as they primarily operate in local markets. In the U.S., small-cap stocks may also be of interest, as they may benefit from the “Make America Great Again” policy and potential tax cuts.
The development of artificial intelligence is in the spotlight of the technology sector. The expert highlighted that the Trump Administration’s $500 billion investment in AI for next year, along with $100 billion allocated for the current year, create significant growth opportunities. Although Amundi is actively integrating artificial intelligence into investment processes, final decisions are, certainly, made with the expertise of the company’s experts.
[1] The information is presented as of January 30, 2025.
