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Carmignac Investissement: Letter from the Fund Manager

  • Author(s)
    David Older
  • Published
  • Length
    3 minute(s) read
  • +2.5%
    Carmignac Investissement’s performance

    in the 4th quarter of 2022 for the A EUR Share class

  • +0.8%
    Reference indicator’s performance

    in the 4th quarter of 2022 for the reference indicator

  • +0.9%
    Performance of Carmignac Investissement over the semester

    versus +0.2% for the reference indicator

Over the period, Carmignac Investissement recorded a performance of +2.49%, above its reference indicator (+0.75%). Over 2022, the fund posted a -18.33% performance vs -13.01% for its reference indicator.

Market environment

As US inflation peaked over the quarter, markets celebrated hopes of a future pivot by central banks, especially as a global economic recession looms large. Towards the end of the quarter, both the Fed and ECB dashed market hopes by putting rate cuts off the table, albeit confirming a slowdown in their pace of tightening. In China, recession risks led the government to lift its zero-covid restrictions, which boosted hopes of a recovery. Despite a correction at the end of the year, equity markets recorded a strong rebound from their yearly low, supported by less volatile interest rates.

How did we fare in this context?

Carmignac Investissement recorded a solid positive performance over the period, above its reference indicator, allowing it to regain some of the yearly losses. Its positive performance can be mostly ascribed to a good stock picking within energy (Schlumberger), Industrials (Airbus, Safran), Luxury (Hermes) and Healthcare (Novo Nordis, Essilor). It also reflects the positive contribution of various portfolio allocation changes operated throughout the year (reduction in high P/E companies, increased exposure to industrial & energy names, significant allocation to defensive sectors).

Outlook

Taking advantage of this year’s volatility, we have built a portfolio that capitalizes on what can be the next promising market trends and dynamics:

  • A core equity portfolio which remains geared towards companies and sectors that we consider as best able to withstand an economic slowdown, especially in developed countries where we expect 2023 GDP growth rates to face headwinds. However, we did take profits on some of our holdings in healthcare and consumer staples, as they already reaped the benefits of their defensive nature. One area of focus for us revolves around how companies can use innovation to address global health challenges. One challenge is the worrying increase in obesity, which Novo Nordisk and Eli Lilly are addressing with blockbuster drugs Wegovy and Mounjaro. Within consumption, we focus on companies offering essential goods (Nestle, Colgate), as they historically performed well in recessionary backdrops, on luxury companies with high and stable margins (Hermes, LVMH), and on companies leveraging the increasing adoption of digital technologies (Universal Music, UBER, Booking).

The rising trends of digitization and artificial intelligence (AI) also create long term secular opportunities with less sensitivity to the economic cycle. For example, the growth of AI requires significant investments in infrastructure and compute power, and we have related investments in AMD, Marvell, Microsoft and Oracle around this theme.

  • The prospect of structurally higher developed market’ inflation and rates, both likely to pressure market valuations, has prompted us to focus on investment themes that can perform with this backdrop.

One focus has been on the industrial sector, especially in the US. The firms we selected: 1) are benefiting from the trend towards reshoring supply chains with government support; and 2) already have production capacity in place which confers them a notable advantage in an environment of high inflation and borrowing costs (Emerson Electric, Eaton, Ingersoll Rand, Ferguson).

We also believe that the energy transition to a green future can’t take place effectively without the involvement of today’s oil and gas majors. We have therefore decided to work judiciously with those “transitioners” like technology leader Schlumberger that are firmly committed to promoting clean energy, adopting policies that are in line with our ESG criteria. As responsible investors, we see this as an opportunity to profitably combine our duty as asset managers with our environmental aims.

  • Finally, we increased our exposure to Asia. In China, the lifting of Covid restrictions will lead to a strong rebound in consumption, and government policies have recently become much more supportive.

We have thus increased our exposure to domestic names in the ecommerce (JD.com, Alibaba), sportswear (ANTA) and the property sector (Beike). In Japan, wage growth is supporting higher domestic purchasing power (Dentsu).

Source: Carmignac, Bloomberg, 30/12/2022. Performance of the A EUR Acc share class ISIN Code A EUR Acc : LU0336083497. ¹Reference Indicator: JP Morgan GBI Global (EUR).

Carmignac Investissement

Geared for a changing world

Discover the fund page

Carmignac Investissement A EUR Acc

ISIN: FR0010148981

Recommended minimum investment horizon

Lower risk Higher risk

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Main risks of the Fund

EQUITY: The Fund may be affected by stock price variations, the scale of which is dependent on external factors, stock trading volumes or market capitalization.

CURRENCY: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments.

INTEREST RATE: Interest rate risk results in a decline in the net asset value in the event of changes in interest rates.

DISCRETIONARY MANAGEMENT: Anticipations of financial market changes made by the Management Company have a direct effect on the Fund's performance, which depends on the stocks selected.

The Fund presents a risk of loss of capital.

* Risk Scale from the KID (Key Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time.

Carmignac Investissement A EUR Acc

ISIN: FR0010148981
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 (YTD)
?
Year to date
Carmignac Investissement A EUR Acc +14.27 % +10.39 % +1.29 % +2.13 % +4.76 % -14.17 % +24.75 % +33.65 % +3.97 % -18.33 % -
Reference Indicator +17.50 % +18.61 % +8.76 % +11.09 % +8.89 % -4.85 % +28.93 % +6.65 % +27.54 % -13.01 % -

Scroll right to see full table

3 years 5 years 10 years
Carmignac Investissement A EUR Acc +4.31 % +3.97 % +5.20 %
Reference Indicator +5.77 % +7.73 % +10.28 %

Scroll right to see full table

​Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor).

Source : Carmignac at 30/12/2022

Maximum subscription fees paid to distributors : 4,00%
Redemption fees : 0,00%
Ongoing Charges : 2.43%
Conversion Fee : 0%
Management fees : 1,50%
Performance fees : 20,00%

Marketing communication. Please refer to the KID, prospectus of the fund before making any final investment decisions. ​​This document is intended for professional clients.

This material may not be reproduced, in whole or in part, without prior authorisation from the Management Company. This material does not constitute a subscription offer, nor does it constitute investment advice. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. This material has been provided to you for informational purposes only and may not be relied upon by you in evaluating the merits of investing in any securities or interests referred to herein or for any other purposes. The information contained in this material may be partial information and may be modified without prior notice. They are expressed as of the date of writing and are derived from proprietary and non-proprietary sources deemed by Carmignac to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Carmignac, its officers, employees or agents.​

Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor).​ The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged.​

Reference to certain securities and financial instruments is for illustrative purposes to highlight stocks that are or have been included in the portfolios of funds in the Carmignac range. This is not intended to promote direct investment in those instruments, nor does it constitute investment advice. The Management Company is not subject to prohibition on trading in these instruments prior to issuing any communication. The portfolios of Carmignac funds may change without previous notice. The reference to a ranking or prize, is no guarantee of the future results of the UCIS or the manager.​

Morningstar Rating™ : © Morningstar, Inc. All Rights Reserved. The information contained herein: is proprietary to Morningstar and/or its content providers; may not be copied or distributed; and is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.​

Access to the Funds may be subject to restrictions regarding certain persons or countries. This material is not directed to any person in any jurisdiction where (by reason of that person’s nationality, residence or otherwise) the material or availability of this material is prohibited. Persons in respect of whom such prohibitions apply must not access this material. Taxation depends on the situation of the individual. The Funds are not registered for retail distribution in Asia, in Japan, in North America, nor are they registered in South America. Carmignac Funds are registered in Singapore as restricted foreign scheme (for professional clients only). The Funds have not been registered under the US Securities Act of 1933. The Funds may not be offered or sold, directly or indirectly, for the benefit or on behalf of a «U.S. person», according to the definition of the US Regulation S and FATCA. Company. The risks, fees and ongoing charges are described in the KID (Key Information Document). The KID must be made available to the subscriber prior to subscription. The subscriber must read the KID. Investors may lose some or all their capital, as the capital in the funds are not guaranteed. The Funds present a risk of loss of capital. ​

The Funds’ prospectus, KIDs, NAV and annual reports are available at www.carmignac.com, or upon request to the Management​ Carmignac Portfolio refers to the sub-funds of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive.​ The French investment funds (fonds communs de placement or FCP) are common funds in contractual form conforming to the UCITS or AIFM Directive under French law

  • UK: This document was prepared by Carmignac Gestion and/or Carmignac Gestion Luxembourg and is being distributed in the UK by Carmignac Gestion Luxembourg UK Branch (Registered in England and Wales with number FC031103, CSSF agreement of 10/06/2013).​ ​FP Carmignac ICVC (the “Company”) is an Investment Company with variable capital incorporated in England and Wales under registered number 839620 and is authorised by the Financial Conduct Authority (the “FCA”) with effect from 4 April 2019 and launched on 15 May 2019. FundRock Partners Limited is the Authorised Corporate Director (the “ACD”) of the Company and is authorised and regulated by the FCA. Registered Office: Second Floor, 52-54 Gracechurch Street, London EC3V 0EH, UK; Registered in England and Wales with number 4162989. Carmignac Gestion Luxembourg SA, UK Branch (Registered in England and Wales with number FC031103, CSSF agreement of 10/06/2013) has been appointed as the Investment Manager and distributor in respect of the Company.

  • In Switzerland: the prospectus, KIDs and annual report are available at www.carmignac.ch, or through our representative in Switzerland, CACEIS (Switzerland), S.A., Route de Signy 35, CH-1260 Nyon. The paying agent is CACEIS Bank, Montrouge, Nyon Branch / Switzerland, Route de Signy 35, 1260 Nyon.

The Management Company can cease promotion in your country anytime. Investors have access to a summary of their rights in English on the following links: UK ; Switzerland ; France ; Luxembourg ; Sweden