Amundi Outlook 2022
2022 : Sticky inflation , slower growth and swifter ESG integration
Following the strong growth rebound in 2021 , this year looks more challenging for investors to navigate . But there are still plenty of opportunities to be found , as we explore in our 2022 Outlook .
As the memory of last year ’ s favourable environment for global growth fades , it is our conviction that inflation will remain structurally higher than in the last decade . We encourage investors to be ready for persistent inflation pressures and interest rate rises .
Rising inflation has increased investor uncertainty and made convictions harder to hold . This uncertainty is reflected in the responses to our investor survey , with 15 % unsure about a regime change versus transitory inflation , while 85 % were split almost evenly .
This uncertain context surrounds us as investors face unprecedented pressure to tackle the climate crisis , accelerate the energy transition , advance social equality and move towards an inclusive growth model . Today we are at a critical juncture on the road to a new economic and financial regime .
Inflation makes a comeback
We believe inflation will be sticky and higher than central banks currently expect . It will not likely return to pre-crisis levels . Supply bottlenecks , surging commodities prices , wage growth and higher taxation have combined with slowing economic momentum to raise the spectre of a “ back to the 1970s ” stagflation scenario .
Meanwhile , the era of ultra-easy , synchronised monetary policy is coming to an end . Desynchronisation among monetary authorities will be a theme of 2022 , with central banks diverging on inflation targets and rate rises . Meanwhile , markets will rotate to value versus growth stocks , and the climate emergency will also impact growth . This environment will prove challenging for investors , and 2021-level returns for equities should not be expected .
A bumpy road ahead
These elements combine in our central scenario which we see as the most likely path over the next 12 months . It will present as a bumpy road , with regional divergences . Investors should prepare for lower expected risk-adjusted returns , a steepening US Treasury yield curve ( followed by the same for the eurozone and emerging markets ) and inflation hedging , and should view emerging markets growth as long term with caution needed in the short term .
Survey respondents ’ overall sentiment of 55 % positive or very positive , 7 % negative and 38 % neutral aligns with our views of the year ahead . We believe investors should start 2022 with caution and re-calibrate risk throughout the year , with a focus on portfolio resilience to rising yields .
In our 2022 outlook , we explore the risks , opportunities , themes and scenarios that we anticipate across the ETF market . Within this , we have identified five principal investment themes – European equities , emerging market equities , fixed income , ESG and gold – and we look at how these translate into ETF investment opportunities .
Global Head of ETF , Indexing and Smart Beta Product Development and Capital Markets Amundi
ETF Scan : The Big Picture | 16