Mid-year Outlook 2026:
ETF Implementation Ideas
Power of endurance: staying invested, staying selective
Marketing communication for end investors | Capital at risk
Views are those of Amundi as of 10/07/2026 and are subject to change.
The power of endurance: Stay invested, stay selective
As we enter the second half of the year, you might consider a review of your investment portfolio1 to ensure that it could withstand various scenarios.
The outbreak of hostilities in the Middle East in March underlined the importance of constructing a portfolio that is robust and well diversified2, as the ensuing blockade of the Strait of Hormuz hit international energy markets and shook confidence in the global economy.
Looking beyond the Middle East, the prospects for economic growth are uneven. The US is expected to grow at around 2%3, supported by investment in artificial intelligence (AI). Europe has been harder hit by the energy crisis and policymakers could take a different approach to inflation when compared to the US, with at least one interest rate hike being likely before the year is out3. Emerging markets (EM), meanwhile, are expected to outpace developed markets (DM) as a whole3, though with divergences within the bloc.
With all of this in mind, we set out to provide you with potential investment ideas1 for the second half of the year that should be balanced against your personal goals, time horizons and risk tolerance.
The big picture: Equity building blocks
US equities remain an essential component in many portfolios while AI is a big driver of global growth. But both warrant a selective approach.
The US stock market is dominated by a handful of large companies, or mega caps. You could look at an approach that aims to reduce the concentration risk in mega caps. This might be done either through equal-weight strategies (that invest the same amount in each stock, so no single holding dominates the portfolio) or US ex-mega cap exposures (that remove the largest companies, by market cap, from the index).
Turning to AI, this technology is expected to be one of the strongest long-term growth themes, but the potential opportunity could be broader than just a few large US technology names.
You may want to look at the whole AI value chain including hardware (semiconductors and memory chips), infrastructure (data centres and cloud computing) and adoption (software and applications). The broad view matters because the next phase of the AI story is likely to be less about who built the technology first, and more about who might be able to scale it and use it effectively.
ETF ideas to consider:
Europe: A multi-year revival plan
Europe is moving into a new phase, driven by vast investment in defence, energy security, industrial renewal and AI infrastructure. In other words, Europe could become more of an investment story than a consumption story.
A series of crises – including the Covid-19 pandemic, Russia’s invasion of Ukraine, and Donald Trump’s ‘America first’ policy – have accelerated Europe’s push for greater self-reliance across defence and other key sectors such as industrials, healthcare, energy etc.
Policymakers want Europe to be less dependent on the US and are thus taking steps to build its internal capacity and capabilities to enhance its strategic autonomy. The scope and scale of Europe’s policies and related investment plans could present potential investment1 opportunities in European stocks over many years to come.
ETF ideas to consider:
Fixed income: Pockets of potential
In the bond market, the divergent paths of Europe and the US are something to monitor. The European Central Bank is likely to deliver one more interest rate in 2026, while the US Federal Reserve is expected to maintain rates at their current level3.
One pocket of potential could be in European investment grade (IG) credit, which could offer better value relative to US IG. Ultra-short and short-dated European IG bonds could be considered for the potential income they could offer, with limited rate sensitivity.
The key point is that shorter-dated and flexible fixed income strategies may be more useful than taking on the interest rate risk of longer-duration strategies.
ETF ideas to consider:
EM stocks: Precision matters
EM still offer stronger growth than DM overall3, but performance4 is likely to remain uneven. A pan-EM selection could be considered to capture this overall growth potential of the bloc. However, there are distinct pockets of potential in EM, which could be unlocked with a more precise allocation.
Within Asia, South Korea and Taiwan stand out for their central roles as producers of memory chips and semiconductors – components that are key to the growth of AI. Similarly, China A-shares5 could offer a more targeted route into China's domestic AI and technology sectors.
Meanwhile, Brazil constitutes almost 60% of the overall MSCI Latin America Index6. Exposure to either or both could be potential portfolio enhancers. Listed Brazilian companies are in good health and as a commodity producer, an allocation to Brazil could be a potential inflation buffer.
ETF ideas to consider:
Finding balance amid uncertainty
In an environment of higher inflation, geopolitical uncertainty, and economic volatility, you may wish to implement a broader toolkit to increase the robustness of your portfolio. There are several possible strategies that could help to do this.
A GDP-weighted approach to global equities could reduce overexposure to the US and better reflect the wider global economy.
An index tracking gold mining companies could help to diversify2 in an overall climate defined by uncertainty.
Finally, income-focused strategies may also be useful, as they aim to provide regular income while still providing some exposure to key US and European indices.
ETF ideas to consider:
To conclude: Build to endure
The “Power of Endurance” is the capacity to stay invested through volatility, to hold conviction through uncertainty and to build portfolios that do not simply survive the current environment but that could tap into the potential of structural shifts.
The risks are real: a prolonged Strait of Hormuz disruption, AI disappointment, or more aggressive central bank responses to inflationary pressure. But the toolkit to navigate those risks exists across various approaches as outlined in our outlook.
At Amundi, we aim to provide a range ETF with the building blocks to act on each of these convictions with the precision and flexibility that the current environment demands.
1. Investment involves risks. For more information, please refer to the Risk section below.
2. Diversification does not guarantee a profit or protect against a loss.
3. Source: Bloomberg, Amundi Investment Institute forecasts – 17 June 2026
4. Past performance does not predict future returns.
5. China A-shares are of mainland Chinese companies traded on China’s domestic stock exchanges in yuan, as opposed to H-shares (traded from Hong Kong) and B-shares (traded in foreign currency).
6. Source: MSCI. Data as at end-June 2025. For more information regarding the index methodology, please refer to www.msci.com.
Marketing Communication for retail investors | Capital at risk
Views expressed in this communication are those of Amundi as of its publication date and are subject to change.
Information on Amundi’s responsible investing can be found on amundietf.com and amundi.com. The investment decision must take into account all the characteristics and objectives of the Fund, as described in the relevant Prospectus.
KNOWING YOUR RISK
It is important for potential investors to evaluate the risks described below and in the each fund’s Key Information Document (“KID”) and prospectus available on our website www.amundietf.com.
ETFs can be passively managed (“passive ETFs” or “index ETFs”) or actively managed (“active ETFs”)
CAPITAL AT RISK – In the case of passive (or index) ETFs, which are tracking instruments, their risk profile is similar to a direct investment in the underlying index securities. In the case of active ETFs, which are implementing an active strategy, their risk profile is similar to a direct investment in the underlying securities. Investors’ capital is fully at risk and investors may not get back the amount originally invested.
UNDERLYING RISK - The underlying index securities of a passive ETF or the underlying securities of an active ETF may be complex and volatile. For example, ETFs exposed to Emerging Markets carry a greater risk of potential loss than investment in Developed Markets as they are exposed to a wide range of unpredictable Emerging Market risks.
REPLICATION RISK – For a passive ETF, the fund’s objectives might not be reached due to unexpected events on the underlying markets which will impact the index calculation and the efficient fund replication.
COUNTERPARTY RISK - Investors are exposed to risks resulting from the use of an OTC swap (over-the-counter) or securities lending with the respective counterparty(-ies). Counterparty(-ies) are credit institution(s) whose name(s) can be found on the fund’s website amundietf.com. In line with the UCITS guidelines, the exposure to the counterparty cannot exceed 10% of the total assets of the fund.
CURRENCY RISK – An ETF may be exposed to currency risk if the ETF is denominated in a currency different to that of the underlying index securities for a passive ETF or, in the case of an active ETF, to the underlying securities of the strategy. This means that exchange rate fluctuations could have a negative or positive effect on returns.
LIQUIDITY RISK – There is a risk associated with the markets to which the ETF is exposed. The price and the value of investments are linked to the liquidity risk of the underlying index securities in the case of a passive ETF or the securities of the strategy in the case of an active ETF. Investments can go up or down. In addition, on the secondary market liquidity is provided by registered market makers on the respective stock exchange where the ETF is listed. On exchange, liquidity may be limited as a result of a suspension in the underlying market represented by the underlying index tracked by the ETF in the case of a passive ETF or the underlying securities of the ETF in the case of an active ETF; a failure in the systems of one of the relevant stock exchanges, or other market-maker systems; or an abnormal trading situation or event.
VOLATILITY RISK – The ETF is exposed to changes in the volatility patterns of the underlying index (for passive ETF) or securities (for the active ETF) relevant markets. The ETF value can change rapidly and unpredictably, and potentially move in a large magnitude, up or down.
CONCENTRATION RISK – ETFs can select a large portion of their assets in a particular issuer, industry, stocks or type of bonds, country or region for their portfolio. Where selection rules are extensive, it can lead to a more concentrated portfolio where risk is spread over fewer stocks. Where selection rules are extensive, it can lead to a more concentrated portfolio where risk is spread over fewer stocks. This can mean both higher volatility and a greater risk of loss.
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