Investors should remain confident but not complacent
Global investors looking for high yield should remain confident, but not complacent, according to Amundi Asset Management’s outlook.
The study found that in the current environment the financial markets were characterised by a tug of war between the cyclical stabilisation of the economy with the possibility of a rebound and on top of that came the emerging fears about the economic fallout of the coronavirus spread.
As far as financial market valuations were concerned, they were less appealing than they were one year ago, before the US Federal Reserve’s dovish turn, Amundi said.
Also, liquidity remained abundant at the macro level but this affected the general economic backdrop and deserved strict monitoring as it could dry up quickly.
Amundi noted there would be four key themes for investing in the coming months, which would include search for yield which was the mantra for fixed income investors.
The second theme was around the central banks which in 2020 might become “more friend than foe”.
However, investors should be also wary of default rates, which was good so far, but they should also keep an eye on alternative scenarios.
On top of that, comes the US election which might bring about potential dislocations at sector/security levels.
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