Carmignac

Carmignac Patrimoine : Letter from the Fund Managers

Carmignac Patrimoine lost -2.09% in the third quarter of 2021, below the +1.22% of its reference indicator¹, bringing the fund’s performance to +1.31% year-to-date versus +8.14% for the reference indicator.

  • -2.09%
    Carmignac Patrimoine’s performance

    in the 3rd quarter of 2021 for the A EUR Share class

  • +1.22%
    Reference indicator's* performance

    in the 3rd quarter of 2021

  • +25.24%
    Performance since Rose and David manage the Fund*

    vs 18.17% for the category3

Quarterly Performance Review

Markets proved quite variable over the third quarter, with mixed performance overall. In the wake of rising inflationary pressures and the perspective of a slowing pace of growth, markets derailed from their upward trajectory in September. Worries on inflation and a potential inflection in monetary policy fueled a rise in US rates, as well as dollar appreciation. This dynamic also weighed on developed equity markets after a nice rebound supported by strong Q2 earnings season. Finally, the Chinese markets sold-off, triggered by the government’s announcements on stiffer regulation across markets.

Over the quarter, the Fund maintained an exposure to risky assets. While our equity allocation mainly focuses on secular growth, our credit exposure is tilted towards more cyclical sectors like energy and financials. Our stock picking fared relatively well in the US, with names like Salesforce, Netflix and Alphabet recording healthy gains. On the credit side, our bond picking proved also quite rewarding. This, however, did not prevent the Fund from recording a negative performance, driven by our Chinese equity exposure built around secular growth companies. The news flow over the recent months has negatively impacted investor’s sentiment as the Chinese government is working on establishing clearer regulations affecting various sectors and especially tech. On the top of these regulatory measures, a potential default of Evergrande, a large Chinese property developer, raised fears about potential additional spill over effects. All this considerably weighed on Chinese equities over the quarter. To counterbalance this exposure to risky assets, we used our flexibility to mitigate the impact of rising rates in September via our short positions on US rates. However, our cautious approach on equity exposure weighed on the Fund’s performance over the period.

Outlook & Positioning

For the coming months, we should expect a slower economic growth accompanied by rising inflation expectations – that would make it exceedingly hard to arrive at an optimal monetary policy. The main risk of this scenario will be for fixed income markets. While we prefer to maintain a low, or even negative duration to core rates (mostly US & Germany), we balance out this cautiousness with a carry bucket focused on a selection of high yielding assets in emerging markets and credit. These selected assets should resist well in a scenario of rising inflationary pressures as they tend to be better protected thanks to shorter durations and higher coupons. In addition, we focus on situations that tend to profit from inflationary pressures, notably energy and commodities credit. Our exposure to sovereign rates is limited to some selected emerging markets debt like South Korea where hikes have been repriced too high considering the downside risks to medium-term growth. With regard to the equity markets, as interest rates might move higher at a time where growth is actually slowing, companies which are less dependent on the cycle and enjoy pricing power are expected to fare better than the rest of the market. The rest of them are likely to suffer from both lesser activity and margin contraction. This strategy does not prevent to pay particular attention to valuations that at some point could be under pressure. Our portfolio remains built around core thematics 1) the new consumer (14%), with ecommerce players like China’s JD.com and Amazon, sportswear brands Lululemon and Puma as well as luxury company Hermes 2) the digital economy (14%), with fintech names like Square and Affirm, as well as transport and meal delivery platform Uber 3) advanced healthcare (7%), with names like China’s Wuxi Biologics and the American health provider Anthem, and 4) climate change (3%) with Korean battery producer LG Chem and US residential solar provider SunRun.

Finally, regarding China, clearer regulation for big companies should be long term constructive for Chinese markets as it will provide investors more visibility on business models and improve corporate governance standards. However, selectivity prevails. On equity, we mostly focus on segments where a negative scenario has been priced in that we feel is not justified, and those where we see minimal government risk or outright government support (Chinese champions – drug development, green transition). However, in order to reduce the risk of the overall portfolio, we took some profits on our sovereign bonds of the region as the government might support the economy through issuing more debt, rather than through more accommodating monetary policy.

Overall, we adopt a robust portfolio construction characterized by a balanced exposure between risky assets (40% of equity exposure and 29% of credit as of 30/09/2021), active management of duration (around 0) and high level of cash (17%).

Carmignac Patrimoine

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Carmignac Patrimoine A EUR Acc

ISIN: FR0010135103
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (YTD)
?
Year to date
Carmignac Patrimoine A EUR Acc +8.81 % +0.72 % +3.88 % +0.09 % -11.29 % +10.55 % +12.40 % -0.88 % -9.38 % +2.20 % +4.86 %
Reference Indicator +15.97 % +8.35 % +8.05 % +1.47 % -0.07 % +18.18 % +5.18 % +13.34 % -10.26 % +7.73 % +3.27 %

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3 Years 5 Years 10 Years
Carmignac Patrimoine A EUR Acc -2.01 % +2.82 % +1.82 %
Reference Indicator +3.05 % +5.25 % +6.28 %

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Source: Carmignac at 31/05/2024

Entry costs : 4,00% of the amount you pay in when entering this investment. This is the most you will be charged. Carmignac Gestion doesn't charge any entry fee. The person selling you the product will inform you of the actual charge.
Exit costs : We do not charge an exit fee for this product.
Management fees and other administrative or operating costs : 1,51% of the value of your investment per year. This estimate is based on actual costs over the past year.
Performance fees : 20,00% max. of the outperformance once performance since the start of the year exceeds that of the reference indicator and if no past underperformance still needs to be offset. The actual amount will vary depending on how well your investment performs. The aggregated cost estimation above includes the average over the last 5 years, or since the product creation if it is less than 5 years.
Transaction Cost : 0,63% of the value of your investment per year. This is an estimate of the costs incurred when we buy and sell the investments underlying the product. The actual amount varies depending on the quantity we buy and sell.

Carmignac Patrimoine A EUR Acc

ISIN: FR0010135103

Recommended minimum investment horizon

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1 2 3 4 5 6 7
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.

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

CREDIT: Credit risk is the risk that the issuer may default.

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.

The Fund presents a risk of loss of capital.

1 Reference indicator: 50% MSCI ACWI (USD) (Reinvested net dividends) + 50% ICE BofA Global Government Index (USD).
2 23/01/2019
3 EUR Moderate Allocation - Global

Marketing communication. Please refer to the KID/KIID, 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. 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, NAVs 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.

  • In France, Luxembourg, Sweden: 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.

  • In the United Kingdom: the Funds’ respective prospectuses, KIIDs and annual reports are available at www.carmignac.co.uk, or upon request to the Management Company, or for the French Funds, at the offices of the Facilities Agent at BNP PARIBAS SECURITIES SERVICES, operating through its branch in London: 55 Moorgate, London EC2R. This document was prepared by Carmignac Gestion, Carmignac Gestion Luxembourg or Carmignac UK Ltd. 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 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: Hamilton Centre, Rodney Way, Chelmsford, Essex, CM1 3BY, UK; Registered in England and Wales with number 4162989. Carmignac Gestion Luxembourg SA has been appointed as the Investment Manager and distributor in respect of the Company. Carmignac UK Ltd (Registered in England and Wales with number 14162894) has been appointed as a sub-Investment Manager of the Company and is authorised and regulated by the Financial Conduct Authority with FRN:984288.

  • 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.