Asset Allocation

Despite growing awareness, nature remains a hard sell for investors.

French assets came under renewed pressure on Monday after Prime Minister Sébastien Lecornu resigned just hours after unveiling his cabinet. The selloff in equities and widening OAT–Bund spreads reinforced what economists and strategists describe as a new normal: a volatile, fragmented France where politics, not policy, drives market sentiment.

Luxembourg’s private debt market has been flourishing. But products that can pose systemic risks, difficulties with valuation, and potential misunderstandings of the risks involved in the market are issues lurking in the shadows.

Open defiance from Stephen Miran underscores political tensions at the Fed, though markets still expect gradual easing.

At ALFI’s private assets conference in Kirchberg, policymakers and asset managers championed private markets as vital for Europe’s growth and as a bridge for retail investors through ELTIFs. Yet speakers also warned that education gaps, transparency issues, and regulatory hurdles could constrain the sector’s ambitions.

Once seen as compliance or ideology, ESG is becoming part of ordinary risk management. Interviews with asset owners, managers and analysts in Amsterdam, the UK and the Netherlands show how sustainability is increasingly embedded in long term investment strategies.

With the euro expected to strengthen further, portfolio strategies are increasingly being shaped by how much, not whether, to hedge U.S. exposures.

German retail investors put nearly all equity fund inflows into exchange-traded funds in the first half of the year, cementing the country’s role as Europe’s largest ETF market.

France’s government is adrift after Bayrou’s resignation, yet its bonds still draw buyers. Investors point to global tailwinds and deep liquidity, but warn that if sentiment turns, France could be hit harder than its peers.

Artificial intelligence is still at the beginning of its growth curve, but both the infrastructure and the valuations behind the boom show signs of strain. For investors, the opportunity is undeniable, yet so are the risks.