Thursday 26th February 2026
Convictions in the era of controlled disorder
With structural changes across geopolitics and trade, portfolios should reflect this new era of controlled disorder. Amundi's convictions on risk, correlations and growth offer an insight on the new playbook.
Heightened trade tensions, a landmark US Supreme Court ruling and the steady drumbeat of fiscal expansion have done little to shake Amundi’s core investment convictions. In its latest Investment Talks update, the €2 trillion ($3.3 trillion) global asset manager acknowledges that the policy backdrop has become more complex. And yet, the underlying cycle remains intact, and investors should resist the temptation to retreat.
For advisers grappling with concentrated equity markets, geopolitical risk and a client base increasingly sensitive to volatility, the message is to diversify, stay flexible and look beyond the obvious trades.
A regime shift, not a downturn
Amundi characterises the current environment as a ‘regime shift’ marked by heightened policy uncertainty and a distinct break in the international order. The re-emergence of tariffs as a policy tool has added a fresh layer of unpredictability.
Yet the macro data, in Amundi’s assessment, does not point to an imminent downturn. The US economy is tracking close to 2.5 per cent year-on-year growth in 2025. This is supported by AI-driven capital expenditure and resilient consumption. In Europe, late-cycle growth surprises in Italy and Spain have created stronger carry-over momentum into 2026.
This is not a benign backdrop, but nor is it recessionary. Instead, markets are undergoing significant rotations across sectors and regions. Investors should be thoughtful about how they adjust to a world in which trade policy and geopolitics are as important as the economic cycle itself.
The era of “controlled disorder”
“The era of controlled disorder is about realising that the world is not de-globalising but becoming multi-polar. Investors would need to navigate the markets through better diversification,”
Monica Defend, Amundi Investment Institute
This notion of ‘controlled disorder’ resonates with many advisers and their clients. Global supply chains are being reconfigured rather than dismantled. The India–EU trade deal is one example of Europe seeking to diversify economic dependencies. Meanwhile, China continues to assert technological and geopolitical influence in areas spanning semiconductors to clean energy.
Amundi’s response is to deepen its conviction on structural hedges. Gold, in particular, is positioned as a beneficiary of geopolitical risk and rising public debt. Base metals such as copper are also seen as critical to the green transition.
Tariffs, the rule of law and market volatility
The Supreme Court ruling has not derailed the protectionist agenda, but it has complicated it. The decision affects tariffs imposed under the International Emergency Economic Powers Act (IEEPA) of 1977, including fentanyl-related tariffs and certain universal duties. Alternative legislative routes, such as Sections 122, 301 and 232 of the Trade Act of 1974, remain available but may prove more cumbersome.
Aidan Yao, senior investment strategist at Amundi Investment Institute, views the ruling as a double-edged sword.
“The ruling serves as a reminder to investors that the rule of law is firmly in place in the US. It also confirms that in a world of controlled disorder, trading arrangements would change quickly,” he says.
Yao adds that, “President Trump can still use other acts to further his tariff agenda, which would, of course, complicate matters for companies and countries involved.”
The implication for portfolios is near-term volatility in trade flows and corporate investment. Advisers should be prepared for market swings driven as much by courtrooms and congressional negotiations as by earnings releases.
Beyond the US tech trade
Amundi’s third conviction will strike a chord with advisers wary of excessive concentration in technology stocks.
“Maintaining a global approach in equities, beyond the tech race in the US, will be crucial for generating sustainable returns,” says Vincent Mortier, Amundi’s group CIO.
The firm argues that markets are transitioning from a liquidity-driven, synchronised regime to one in which balance sheets, industrial policy and capital allocation decisions are setting prices. Rather than chasing broad AI themes, Amundi prefers companies exposed to AI-related physical infrastructure and industrial enablers.
Regionally, Japan’s corporate reforms and reflation narrative are attracting renewed foreign interest. In Europe, defence, infrastructure and financials are positioned to benefit from a push towards strategic autonomy, particularly as the NATO allies raise defence spending.
Recent performance data underscores the rotation. Year-to-date, equal-weighted and value indices in the US have outperformed growth-heavy benchmarks, while Japanese, European and broader emerging market indices have led major US technology indices.
Fiscal expansion and the dollar debate
Amundi’s fourth conviction is that fiscal and monetary policy are the key drivers of opportunity and risk. It retains a structural ‘weak’ call on the US dollar, targeting US$1.22 against the euro by year-end (from US$1.18 at present), citing high debt levels and reserve diversification by central banks.
“The interplay of fiscal policy, monetary policy and geopolitics would affect market behaviour, implying traditional safe-havens may no longer work,” the firm warns.
For advisers, this challenges long-held assumptions about correlations. If the dollar’s safe-haven status erodes and bond markets come under pressure from fiscal expansion it requires fresh thinking. The traditional 60/40 constructions may require more active duration management and alternative diversifiers.
On rates, Amundi expects the Federal Reserve to deliver two cuts in mid and late 2026, with the European Central Bank likely to trim once in the third quarter. In Japan, fiscal expansion under Prime Minister Takaichi and potential pressure on the Bank of Japan add further complexity to duration positioning.
Europe and emerging markets in focus
Finally, Amundi reiterates its constructive stance on Europe and emerging markets. Europe’s realisation that it cannot rely indefinitely on US security guarantees is catalysing investment in defence, technology and supply chains. For long-term investors, this strategic autonomy agenda could reshape sector leadership across the continent.
Emerging markets, particularly India, are viewed as structural allocations. Amundi has marginally upgraded India’s 2025 GDP growth projection to 6.8 per cent and expects policy continuity to support the capex cycle. The combination of domestic reform, trade realignment and a growing middle class reinforces the diversification case.
In practice
For advisers, the practical implications are nuanced rather than dramatic. This is not a call to slash risk, nor to double-down on defensive positioning. Amundi maintains a moderate risk-on stance in what it sees as a late-cycle environment.
However, high valuations need to be carefully assessed. In a world of controlled disorder, portfolios need to be more intentional. Geographic diversification, exposure to real-economy sectors such as industrials and structural hedges like gold all offer avenues for consideration.
For advisers tasked with balancing client anxiety against long-term objectives, that combination of conviction and flexibility may prove the most valuable asset of all.
Nicholas Way is a contributing editor at The Inside Adviser and has covered business, retirement, politics, human resources and personal investment over a 50-year career.
