By Chris Iggo, Chair of the Investment Institute and CIO for AXA IM Core, BNP Paribas Asset Management
My 26-year stint in asset management is coming to an end. It started with the dotcom boom (and subsequent bust) and concludes with anxieties over whether machines will make human workers redundant.
At the turn of the century, equities were boasting very high valuations – and today’s lofty prices echo that period. All along there have been huge shocks, be they financial, geopolitical or otherwise – some even fuelled waves of conspiracy theories in the arenas of epidemiology, military strategy and climate change.
One of the most common fears has been over unchecked corporate greed and profligate governments, that they would take society to the edge of sovereign bankruptcy; that the fiat money system would collapse; that there would be a disastrous clash of cultures. None of these have however materialised.
Instead, adherence to diversification, risk management and good analysis have generally served investors well. I hope I have played some role in delivering on financial aspirations to many of the clients that I have had the great honour to work with over the last two decades-plus.
- Key macro themes – Central banks reiterating their focus on controlling inflation
- Key market themes – Bond vigilantes have roared; returns could be better going forward
Manchester United was a great team when…
…I joined AXA Investment Managers in May 2005. Since then, not so much. But in that time, I’ve written – rough guestimate – about 1,000 of these weekly notes (give or take). And this will be the last, as I leave the company at the end of the month.
Being focused on macroeconomic developments and how they impact bonds, equities, credit, interest rates and currencies has meant there has always been a lot to write about. Being a Manchester United fan has meant the same, although that has become a source of disappointment in recent years. I hope that my readers have been entertained and my thoughts on markets have been interesting.
World in motion
There have been many unforgettable periods. The 2008/2009 global financial crisis was certainly one of them. It happened around the time I became responsible for part of the global fixed income team. You learn a lot about credit and liquidity when balance sheets are imploding. The years that followed were marked by massive central bank quantitative easing programmes, ridiculously low yields, and increased compliance.
The pandemic was the nadir. It changed how we worked. It shifted focus to sustainable investing which, with hindsight, somewhat detracted from understanding what was happening with the global economy. The result was unforeseen inflation and portfolios that were not prepared for 2022’s sharp interest rate reset.
I got very excited about decarbonisation, the democratisation of power generation, and the prospects for a massive reduction in the world economy’s reliance on oil produced in politically volatile regions.
Not too many years later we have an ongoing energy shock, wars in Ukraine and the Middle East, and electricity supply increasingly monopolised by data centres. Oh, and did I mention record high summer temperatures, wildfires and drought? The road to net zero and a cleaner climate continues to be challenging.
New dawn fades
It’s kind of gone full circle for me. Yields are back to levels they were at when I started at this company, although still a long way from the double-digits available in the gilt market when I joined Chase Manhattan Bank in 1989.
Bonds, in my view, are more attractive than they have been for years despite all the well-known concerns about inflation, government borrowing, private credit and the ramp-up in corporate borrowing. The warnings about a fixed income disaster would have been better sounded in 2022 than in 2026.
Equities are more expensive, but the earnings cycle appears to be strong. And anyway, we always tend to think equities are expensive. Increasingly the narrative on artificial intelligence will be key to how equity markets perform.
Will investors remain as enthusiastic about a technology that, according to some recent reports, could potentially wipe out humanity? The demand for capital, land, computing power, water and electricity is growing as the AI power race intensifies.
Society won’t turn completely against AI but the increased marginal cost of providing the computing power will mean the economics change.
I do worry about supply in a broad sense. Western societies are not adequately meeting the demand for healthcare, education, housing and, potentially, security.
Governments take large amounts of income in tax and capital in borrowing, yet the burden of tax and regulation means that frictional costs for the private sector are increasing. We don’t want marginal cost curves to become steeper.
Markets are at an interesting point. The rise in bond yields has forced central banks to take back some of the post-pandemic easing of interest rates. Rates aren’t that high by historical standards and inflation is, largely, a result of supply-side effects.
As is customary for a veteran of the bond market, I think fixed income returns are going to be possibly quite strong over the next year. Long duration bonds have been in a four-year bear market. Term premiums have risen. It is surely time for improved returns.
But for investor confidence to be unleashed enough to fuel another sustainable bull market it is likely to need a positive turn of events in the geopolitical sphere, a reversal of the global trend towards protectionism, and a different approach to fiscal policy.
Of course, we need safety nets, public services and defence, but if we want economic growth then private sector animal spirits need reinforcing. If things don’t change then markets might be in for a potential shock.
That will be a buying opportunity, but crashes do create victims. That is something to keep in mind.
Fine time
The markets have been a great place to work, and I’ve learnt a lot about investing – and people – in my career. My key takeaways are to be humble, to check one’s privilege and to remember that most of the time, we are looking after other people’s pensions, savings and insurance.
The game can be very honourable, but arrogance can creep in. Equally, there are so many interesting, smart and good people working in the markets. Being exposed to risk takers and profit-and-loss constraints generates a robust approach to life.
I do think there has been a tendency to take ourselves more seriously in recent years, to over-reach our missions, and to elevate hubris over realism and mutual respect. Of course, I am maybe just a little sad to be stepping down (for now at least) and seeing so many of my generation do the same.
Thankfully my 26-year-old son, who is trading in the bond market, can keep me on my toes about curve flatteners, credit spreads and liquidity without me having to lose too much sleep when it all goes a bit Pete Tong!
My colleagues at BNP Paribas Asset Management will keep this weekly note going. I will sign off with a huge thanks to all those I have worked with over the past 21 years. I have been fortunate enough to work with clients in South America, the US, Europe, Japan, China, Australia and throughout Asia.
I’ve seen bonds issued and mature, a fair few defaults, and the questionable desire of the industry to keep complicating financial products undeterred despite the efforts of regulators everywhere.
Simplicity, clear goals, diversification. They are useful things to keep in mind in this business. I hope I can manage my pension this way as it becomes more real. When gilt yields determine the annuity rate I can lock into, then I don’t have such a problem with them going higher!
Most of all though, I would like to thank my fellow members of the “Rain” WhatsApp group – you know who you are. Through those conversations I have been able to maintain a sense of humour and to remain humble. Cheers and never stop.
Performance data/data sources: LSEG Workspace DataStream, ICE Data Services, Bloomberg, BNP Paribas AM, as of 22 September 2026, unless otherwise stated. Past performance should not be seen as a guide to future returns.
