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World markets could be approaching a tipping point in 2020 as funding costs start to rise, making bonds a riskier investment and some credit sectors, such as U.S. shale oil, particularly fragile, according to asset manager Carmignac.

Didier Saint-Georges, Carmignac’s managing director and investment committee member, told the Reuters Global Investment Outlook Summit on Thursday that more policymakers recognized the need for government spending to boost economic growth -- so-called Keynesian policies.

The impact of these discussions will be felt by markets next year, he predicted, boosting assets such as ‘value’ stocks, emerging market currencies and commodities that were unloved during the years of negative interest rates.

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But the big risks, according to Saint-Georges, will be in safe-haven assets such as government bonds or in those he describes as “fake quality” -- companies that boomed under low funding costs but could unravel when the easy-money tide turns.

“Think of the credit market and within the credit market, U.S. shale oil ... You have low-quality, highly leveraged, over-invested small players being faced by less funding, lower oil prices and higher valuation so that’s a serious issue.”

“This sector is very fragile and it ticks all the wrong boxes.”

He mentioned WeWork, which recently abandoned share listing plans amid questions over its losses and business model, as an example of how investors are starting to discriminate more between companies.

Saint-Georges, who helps run 35 billion euros ($38.69 billion), also warned that euro zone bond yields were so low, they did not need to rise much to smack bond prices lower.

Euro zone bond yields have risen recently on signs that central bankers are unlikely to ease policy further and fiscal policy needs to do more -- German 10-year yields are up 50 basis points from record lows hit in September.

“You don’t have to be uber-bearish on yields to recognize that the bond market’s become quite risky,” he said. “In a Keynesian policy (scenario) you probably don’t want to be so massively into long-duration assets.”

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Southern Europe has been a big beneficiary of cheap money, and yields in Italy and Greece, which were mired in crisis not long ago, have fallen the most this year.

Saint-Georges said Greek and Italian yields could compress further, with Greece especially seeing economic progress and credit rating upgrades.

“If you’re asking where you want to be positioned in European sovereigns, to put it simply you’re long Italy and Greece and you’re short Bunds,” he added.

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