Whatever may come next, take time to sharpen your axe

In early March, a number of Amundi’s experts gathered in Paris to present their views to clients on some of the current concerns facing pension funds. Moments after they spoke about the multiple challenges of inflation, of geopolitical instability and of the impact the climate crisis will have on investment returns, shares in Silicon Valley Bank began to slide. The sudden return to market panic acts as a timely reminder that you can never be too prepared for the next crisis and the predominant concern remains uncertainty.

Our view is that the current markets appear to be driven mostly by rising fears of recession, following an excessively complacent start to the year. The issue markets face is one of a confidence shock and not a credit shock. While negative sentiment can have a powerful impact, it is important to bear in mind that little has changed in terms of fundamentals over the last few weeks.

This edition of Amundi’s Pension Funds Letter revisits some of the wider global trends and events and the implications these will have on the pensions sector in particular.

Net zero has become a buzzword widely established in vocabulary beyond the finance industry, but what are the practical implications for pension funds as investors and how can your actions help convert the multitude of net zero pledges into concrete measures? To help investors navigate the net zero investment environment, several key ideas are discussed.

Geopolitical events spill over into markets with ever increasing frequency and little evidence that this trend will reverse any time soon. The challenge for investors will be to identify and predict the events that will trouble the markets and thus portfolios the most. Amid continued war in Europe, tensions in the Far East and pressures in the transatlantic relationship (and others), we attempt to pinpoint where the stakes are the highest this year.

Turning to longer term shifts, high inflation and concerns over energy supply sustainability and cost has added a sense of urgency to the net zero movement, but it is also increasing the likelihood of diverging national policies and a disorderly transition. Amundi’s latest capital market assumptions publication looks at the implications this will have on long-term asset class forecasts and strategic allocation and what this could mean for pension funding ratios in the longer run.

Finally, we conclude with our regular look at the markets and the recent evolution in funding ratios. We also look at the events in the swap market in 2022 and what the dislocation in swap spreads in the Eurozone has meant for LDI management.


  • Transformation to Net Zero: Implications for Pension Funds
  • The biggest geopolitical risk for 2023? China sending ‘lethal aid’ to Russia
  • A rocky net zero transition pathway
  • Pension funding ratios: Back and forth on inflation anticipations


Francesca CICERI
Global Head of Institutional Coverage
Global Head of Corporates and Corporate Pension Funds Clients