INSIGHTS MEGATRENDS: THE PATH FORWARD THE PATH MEGATRENDS: 2016 RD & 3 ND JUNE 2 JUNE 2nd & 3rd, 2016 Megatrends: The path forward INSIGHTS AMUNDI WORLD INVESTMENT FORUM - INSIGHTS 2016 JUNE 2nd & 3rd, 2016 Table of contents EDITORIAL Philippe ITHURBIDE, Global Head of Research, Chief Economist at Amundi ....................... p.06 THE AMUNDI WORLD INVESTMENT FORUM GOES DIGITAL ............................................................................................... p.08 INTRODUCTION Opening Speech - MEGATRENDS: THE PATH FORWARD ................................ p.12 Yves PERRIER, CEO of Amundi TACKLING THE CHALLENGES AHEAD Keynote address ........................................................................................................... p.22 Jeremy RIFKIN, Economist and President of the Foundation on Economic Trends Roundtable - IDENTIFYING MACROECONOMIC AND FINANCIAL MEGATRENDS .............................................................................. p.30 Arundhati BHATTACHARYA, Chairman of State Bank of India Olivier BLANCHARD, Former adviser and Chief Economist at the International Monetary Fund Florence EID-OAKDEN, CEO and Chief Economist of Arabia Monitor Philippe ITHURBIDE, Chief Economist at Amundi Moderator: Adrian DEARNELL, Financial Journalist, Found ing Partner of EuroBusiness Media Keynote address ........................................................................................................... p.40 Jim ROGERS, International Investor Roundtable - REVIEWING ASSET AND RISK ALLOCATION ............................. p.50 Amin RAJAN, CEO of CREATE–Research Pascal BLANQUE, Global Head of Institutional Division at Amundi & Chief Investment Officer Romain BOSCHER, Global Head of Equity at Amundi Éric BRARD, Global Head of Fixed Income at Amundi Moderator: Adrian DEARNELL, Financial Journalist, Found ing Partner of EuroBusiness Media Conclusion...................................................................................................................... p.60 by Laurent BERTIAU, Global Head of Institutional Clients at Amundi 4 AMUNDI WORLD INVESTMENT FORUM 2016 MEGATRENDS: THE PATH FORWARD RETHINKING INVESTMENT FUNDAMENTALS Opening speech ............................................................................................................ p.66 Fathi JERFEL, Global Head of Retail Division at Amundi Keynote address ........................................................................................................... p.70 Daniel KAHNEMAN, 2002 Nobel Laureate in Economic Sciences, Psychologist and Economist Roundtable - SOLVING THE LIQUIDITY QUESTION ............................................ p.82 Marie-Anne ALLIER, Deputy Global Head of Fixed Income at Amundi Michael WYRSCH, Chief Investment Officer of Vision Super Pty Ltd, Australia Moderator: Guillaume MAUJEAN, Chief Editor of Finance & Markets at Les Echos Roundtable - ENRICHING STRATEGIES WITH FACTOR INVESTING ............. p.90 Alessandro RUSSO, Head of Factor Investing at Amundi Leslie TEO, Director of the Economics and Investment Strategy Department and Chief Economist at GIC Private Limited, Singapore Moderator: Adrian DEARNELL, Financial Journalist, Found ing Partner of EuroBusiness Media Roundtable - BROADENING THE INVESTMENT UNIVERSE ............................. p.96 Pedro Antonio ARIAS, Global Head of Real and Alternative Assets at Amundi Mark FAWCETT, CIO at National Employment Savings Trust (NEST), United-Kingdom Shahril RIDZA RIDZUAN, CEO of Employee Provident Fund (EPF), Malaysia Moderator: Philippe MUDRY, CEO, Editorial director at l’Agefi Keynote address ......................................................................................................... p.100 Jeremy SIEGEL, Russell E. Palmer Professor of Finance at the Wharton School of the University of Pennsylvania Conclusion.................................................................................................................... p.112 Xavier MUSCA, Deputy CEO of Crédit Agricole S.A. THE FORUM IN PICTURES Dinner cocktail and gala evening - Musée Rodin ....................................................................... p.122 Seated luncheon - Carrousel du Louvre ................................................................................... p.124 SPEAKERS Read the full biographies of the keynote speakers and guest speakers who led our roundtables ... p.130 CONTACTS Find the contact details of your Amundi representatives in Paris and our local offices.....................p.160 5 AMUNDI WORLD INVESTMENT FORUM 2016 MEGATRENDS: THE PATH FORWARD EDITORIAL by Philippe ITHURBIDE, Global Head of Research, Chief Economist at Amundi t is my pleasure to present to you a compendium of the astute observations and shrewd opinions shared at the 2016 Amundi IWorld Investment Forum, Megatrends: The Path Forward. It is my sincere hope that this book of rich insights shared over the two-day event will provide you not only compelling answers to some of today’s most pressing investment questions, but offer you a clear view on how to move forward in the complex economic landscape of today – and tomorrow. And moving forward is precisely what we aim to do in hosting the Amundi World Investment Forum. This annual gathering of the most influential and innovative thinkers in our industry, along with more than 400 of our clients and partners from over 50 countries, is proof positive of our dedication to advancing the conversation so that, together, we may tackle head-on economic trends and the collisions between them, how they are informing the economic and investment context, and how they impact you. Indeed, Megatrends, those long-term economic and social tendencies that are shaping business and society today, represent significant implications for all investors — volatile 6 AMUNDI WORLD INVESTMENT FORUM 2016 MEGATRENDS: THE PATH FORWARD oil prices; the omnipresent threat of terrorism; skewed demographics; political change and upheaval in the US, Europe and around the world; the rise of digital; the imminent threat of climate change. In uncertain times such as these, where can investors find their anchors? It is now more important than ever that we get the fundamentals of investing right. That means we, as your trusted partner, must understand your goals, your means and your risk appetite. And the number one fundamental that must never be underestimated is the importance of asset allocation. In order to take a deep dive into these Megatrends and their impact on investment decisions, this year we welcomed distinguished academic leaders and authorities in the fields of Economics, Finance and Psychology, including Daniel Kahneman, Jeremy Rifkin, Jim Rogers and Jeremy Siegel. In addition, an international spectrum of Amundi experts and special guests shared their views on asset allocation in these difficult-to-navigate waters: Arundhati Bhattacharya, Olivier Blanchard and Florence Eid-Oakden discussed the economic forces placing a strain on emerging economies and the US alike, while Amin Rajan addressed asset and risk allocation. Michael Wyrsch tackled the liquidity question, and Leslie Teo spoke on factor investing. Mark Fawcett and Shahril Ridza Ridzuan discussed how to broaden the investment universe. On Day 1 of the Forum, the audience heard from our speakers on how we must Tackle the Challenges Ahead. What became clear throughout the discussions is that a robust strategy is needed to meet the coming economic and social shifts. The second day addressed how we must Rethink Investment Fundamentals. Simply put, in this new world, many of the old rules simply no longer apply. As your investment “coach”, we put together this forum to accompany you through this era of ambiguity and unpredictability. And we will continue to accompany you, day in and day out, by offering you concrete advice and opinions based on solid research and thoughtful insight into the long- term issues and trends that impact you. Philippe ITHURBIDE, Chief Economist, Amundi 7 AMUNDI WORLD INVESTMENT FORUM 2016 MEGATRENDS: THE PATH FORWARD Digital THE AMUNDI WORLD INVESTMENT FORUM 2016 GOES DIGITAL View all the debates on our dedicated WebTV: http://forum.amundi.com 8 AMUNDI WORLD INVESTMENT FORUM 2016 MEGATRENDS: THE PATH FORWARD More than 800 messages about the #AmundiWIF16 have been sent! Read the best of your contributions on our Social Wall on http://forum.amundi.com Thanks to all for sharing your experience and making the #AmundiWIF16 the first digital live event in Asset Management! #AMUNDIWIF16 messages And PRESS 10 potentially viewed COVERAGE INTERVIEWS by more than in more than backstage on 9 MILLION SOCIAL 15 COUNTRIES Periscope NETWORK USERS 9 AMUNDI WORLD INVESTMENT FORUM 2016 MEGATRENDS: THE PATH FORWARD INTRODUCTION Opening Speech by Yves Perrier CEO of Amundi Introduction MEGATRENDS: THE PATH FORWARD OPENING SPEECH by Yves PERRIER, CEO of Amundi A megatrend is a pattern or a movement that has a major impact on business and society as a whole. Megatrends can be broken down into categories such as globalization, demographic changes, urbanization, shifts in power from developed countries to the largest emerging economies, technology changes, climate change and declining growth. If we are to weather the storms of change, we will need to adapt, said Yves Perrier, Chief Executive Officer of Amundi Group, in his opening remarks at the 2016 Amundi World Investment Forum in Paris. 12 AMUNDI WORLD INVESTMENT FORUM 2016 MEGATRENDS: THE PATH FORWARD AMUNDI: NIMBLE AND AMBITIOUS Speaking