Carmignac

Carmignac P. Credit: Letter from the Fund Managers

  • +1.57%
    Carmignac P. Credit’s performance

    in the 2nd quarter of 2023 for the A EUR Share class

  • +0.76%
    Reference indicator’s performance

    in the 2nd quarter of 2023 for the 75% ICE BofA Euro Corporate Index et 25% ICE BofA Euro High Yield Index

  • +4.17%
    Of annualized performance

    since launch of the fund (31/07/2017), compared to -0.39% for its reference indicator¹.

Carmignac Portfolio Credit was up 1.57% in the second quarter, versus 0.76% for its reference indicator. This brings its year-to-date performance to 2.89%, versus 2.62% for its reference indicator¹.

Quick overview of Q2 2023

Credit markets performed positively over the past three months as the stress created by the idiosyncratic incidents involving Silicon Valley Bank and Credit Suisse abated. In our last letter, in April, our view was that these issues were specific to the banks concerned and not of a systemic nature. And the record banking profits recorded in the first quarter, even adjusted for the rescue windfalls, corroborated our stance. Trouble always manifests in unexpected places when central banks restrict liquidity, but we remain very comfortable with the state of affairs for most large banks in Europe and the United States. Regulators have pushed – and continue to push – for sound liquidity and capital positions and have proven to be pragmatic and responsive in restoring confidence when needed. In addition, the return of positive interest rates is generally favourable for the longer-term profitability of financial institutions. As a testimony to the resumption of calm among investors, BBVA issued a new AT1 in June at a very attractive, but far from punitive, yield – reopening a market many had left for dead just a few weeks ago.

Beyond BBVA, Q2 saw a broad thawing of the primary high-yield market in the developed world. During the previous twelve months, high-yield issuance had been modest and was focused on companies that had engaged in dealmaking before Russia’s invasion of Ukraine, providing bridge loans that could be recycled later on the bond market. Most other companies generally had good liquidity after ten years of accommodative financing and were reluctant to crystallize higher financing costs unless they had no choice. But in May and June, these companies came to accept that their cost of debt will be higher going forward, and they’re refinancing upcoming maturities under these new conditions. The upshot is extremely promising circumstances for us. In fixed income, where investors don’t need to be desperate for yield anymore (because they can now park cash in short-term treasuries at comfortable yields), plain-vanilla BB risk is rewarded at spreads 20% to 30% higher than in 2019. Spreads are even higher in the more complex situations – we recently come across a number of opportunities where we can expect double-digit yields and where we estimate that the underlying fundamental cost of risk is a small fraction of that.

Now that value is returning to credit markets, and wide complexity spreads are available to judicious bond pickers, we see this as very exciting for the future performance of Carmignac Portfolio Credit. Additionally, we expect the higher borrowing costs across the board to restore a credit-default environment similar to the one experienced in the first three decades of the high-yield market. This will create attractive opportunities for high-alpha distressed-debt investments. Our fund already has a small position in a compelling distressed-debt situation that has performed very well since the beginning of the year.

Outlook

We currently have a very diversified portfolio with more than 200 lines and a yield of over 9% at quarter-end. We suspect this yield will climb meaningfully higher thanks to the early refinancing we expect to see on a number of our investments. The best risk-reward profiles in our fund lie in our structured credit book, where select collateralized loan obligation (CLO) tranches offer – in addition to floating rates – very generous spreads relative to their fundamental risk. We also still see meaningful value and generally improving credit quality in the finance and commodities industries.

You can rest assured that we won’t sit on our laurels after several weeks of solid returns. We’re well aware that liquidity remains tight, which will trigger further default incidents, and that volatility may well bounce back in the coming quarters. But if it does, that will usher in new opportunities, and the yield on our portfolio will largely mitigate the downside risk.

Source: Carmignac, Bloomberg, 30/06/2023

Carmignac Portfolio Credit

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Carmignac Portfolio Credit A EUR Acc

ISIN: LU1623762843

Empfohlene Mindestanlagedauer

Geringstes Risiko Höchstes Risiko

1 2 3 4 5 6 7
Hauptrisiken des Fonds

KREDITRISIKO: Das Kreditrisiko besteht in der Gefahr, dass der Emittent seinen Verpflichtungen nicht nachkommt.

ZINSRISIKO: Das Zinsrisiko führt bei einer Veränderung der Zinssätze zu einem Rückgang des Nettoinventarwerts.

KAPITALVERLUSTRISIKO: Das Portfolio besitzt weder eine Garantie noch einen Schutz des investierten Kapitals. Der Kapitalverlust tritt ein, wenn ein Anteil zu einem Preis verkauft wird, der unter seinem Kaufpreis liegt.

WÄHRUNGSRISIKO: Das Währungsrisiko ist mit dem Engagement in einer Währung verbunden, die nicht die Bewertungswährung des Fonds ist.

Der Fonds ist mit einem Kapitalverlustrisiko verbunden.

Carmignac Portfolio Credit A EUR Acc

ISIN: LU1623762843
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (YTD)
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Year to date
Carmignac Portfolio Credit A EUR Acc - - - +1.79 % +1.69 % +20.93 % +10.39 % +2.96 % -13.01 % +10.58 % +4.06 %
Referenzindikator - - - +1.13 % -1.74 % +7.50 % +2.80 % +0.06 % -13.31 % +9.00 % +0.50 %

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3 Jahre 5 Jahre 10 Jahre
Carmignac Portfolio Credit A EUR Acc +0.26 % +3.86 % -
Referenzindikator -1.67 % +0.17 % -

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Quelle: Carmignac am 31/05/2024

Einstiegskosten : 2,00% des Betrags, den Sie beim Einstieg in diese Anlage zahlen. Dies ist der Höchstbetrag, der Ihnen berechnet wird. Carmignac Gestion erhebt keine Eintrittsgebühr. Die Person, die Ihnen das Produkt verkauft, teilt Ihnen die tatsächliche Gebühr mit.
Ausstiegskosten : Wir berechnen keine Ausstiegsgebühr für dieses Produkt.
Verwaltungsgebühren und sonstige Verwaltungs- oder Betriebskosten : 1,20% des Werts Ihrer Anlage pro Jahr. Hierbei handelt es sich um eine Schätzung auf der Grundlage der tatsächlichen Kosten des letzten Jahres.
Erfolgsgebühren : 20,00% wenn die Anteilsklasse während des Performancezeitraums den Referenzindikator übertrifft. Sie ist auch dann zahlbar, wenn die Anteilsklasse den Referenzindikator übertroffen, aber eine negative Performance verzeichnet hat. Minderleistung wird für 5 Jahre zurückgefordert. Der tatsächliche Betrag hängt davon ab, wie gut sich Ihre Investition entwickelt. Die obige aggregierte Kostenschätzung enthält den Durchschnitt der letzten 5 Jahre oder seit der Produkterstellung, wenn es weniger als 5 Jahre sind.
Transaktionskosten : 0,43% des Werts Ihrer Anlage pro Jahr. Hierbei handelt es sich um eine Schätzung der Kosten, die anfallen, wenn wir die Basiswerte für das Produkt kaufen oder verkaufen. Der tatsächliche Betrag hängt davon ab, wie viel wir kaufen und verkaufen.
Vielen Dank für Ihre Rückmeldung!