Bonds in the new policy order

2026 ETF implementation ideas.

For professional clients and qualified investors only

Bonds in the new policy order

Key investment convictions

High and rising US public debt, and a weaker US dollar, are likely to reinforce demand for global bond diversification. In this new paradigm, we favour European fixed income, and in the US, investment‑grade credit, over more volatile US Treasuries.

Fixed income markets in 2026 are likely to be shaped by a combination of weakening US growth, still-elevated inflation and persistent fiscal uncertainty. US bond yields are expected to remain range-bound, requiring a disciplined, tactical approach to duration, with yield-curve steepening expected to emerge later in the year.

Inflation remains a key call, with break-evens offering potential value^[1] in an environment

where expansionary fiscal and monetary policy, tariffs and a weaker dollar continue to support price pressures.

Investment-grade credit retains its role as a core allocation across the US and Europe, supported by solid fundamentals, disciplined issuance and a better risk-return profile than government bonds.^[4] By contrast, we remain cautious on US high yield, given its sensitivity to regional banks, private-debt linkages and the impact of softer consumer dynamics. Intermediate US Treasuries can continue to provide balance within duration, while inflation-linked exposure remains relevant as a potential buffer against inflation risk.

We remain positive on European debt. Growth is below potential, inflation is easing and valuations relative to the US are appealing
(see chart on page).^[4]

Anticipated ECB rate cuts and an expanding European bond market improve the outlook for sovereigns, particularly in the euro-area periphery, where improving fiscal discipline supports the potential for further spread narrowing. European investment-grade credit also remains well supported, with fundamentals and supply dynamics leaving room for additional resilience.^[6]

European bonds appealing vs US

Source: Amundi Investment Institute, Bloomberg. Data as of 31/10/2025.

Overall, diversification^[5] across high-quality credit in the US and Europe, inflation-protected US securities, intermediate US duration and euro-area sovereigns may offer a more balanced way to navigate the new policy order.^[1]

ETF implementation ideas

Core allocation

ETF	Ongoing charges*
Amundi Core Euro Government Bond UCITS ETF	0.09%
Amundi Core EUR Corporate Bond UCITS ETF	0.07%
Amundi EUR Corporate Bond 1-5Y ESG UCITS ETF	0.20%
Amundi Core USD Corporate Bond UCITS ETF	0.07%

Targeted asset allocation

ETF	Ongoing charges*
Amundi US Treasury Bond 7-10Y UCITS ETF	0.06%
Amundi US TIPS Government Inflation-Linked Bond UCITS ETF	0.09%