AXA IM’s Iggo remains risk-on

Mike Taylor

Managing Editor and Publisher

14 November 2024

Investors are facing a much more volatile period ahead in the wake of the US Presidential Election with a possible return to boom and bust cycles, according to AXA Investment Management Chief Investment Officer, Chris Iggo.

In an interview with Financial Newswire, Iggo said the volatility likely to be encountered stood in contrast to the manner in which the Chairman of the US Federal Reserve had managed to engineer a soft landing.

“We’re in for a much more volatile period going forward,” he said.

Iggo said that it is environment which has persuaded him to go into 2025 maintaining a ‘risk-on’ on approach.

Asked how he was positioning in light of the electoral outcome in the US, Iggo said that, thus far, AXA IM had not really seen the need to be panicked into doing anything.

“We’ve had a positive view on fixed interest anyway; the slightly higher yields are attractive to us but we don’t see a huge amount of further upside to yields,” Iggo said. “I think the Fed probably still is able to cut rates a couple more times in the next three to six months. The underlying conditions for corporate credit markets are still pretty fundamentally good.”

He said he remained relatively positive globally but was relatively bearish about Europe and somewhat more positive about China.

Iggo said that Europe had been exhibiting weak growth and there was no obvious evidence about that growth accelerating.

“The only kind of policy flexibility is on the interest rate side and European Central Bank has already cut rates,” he said. It will probably continue to cut rates, but I’m not sure how much of a kind of positive growth impulse will be coming from that fiscally.”

“If Trump does impose. 10% tariffs on European exports, that’s a blow as well. They need exports. The upside is that if China does get its act together and recovers, then that does provide some opportunity for European exporters.”

“But overall, it’s a fairly soft outlook for Europe. When we look at the equity side there, you know it’s a value play, it’s dividend yield, but there’s not a lot of growth I mean. Earnings growth is? Half the pace it is in in the US,” Iggo said.