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Carmignac Investissement: Letter from the Fund Manager

[Management Team] [Author] Older David
Author(s)
David Older
Published on
24 April 2023
Read time
4 minute(s) read
+5.79%Carmignac Investissement’s performance in the 1st quarter of 2023 for the A EUR Share class
+5.41%Reference indicator’s performance in the 1st quarter of 2023
1st QuartileOver 1-year in the global large-cap growth equity category

Over the first quarter of 2023, Carmignac Investissement recorded a performance of +5.8%, outperforming its reference indicator (+5.4%).

Market environment

In January, markets were convinced that a soft landing was possible and that the worst might be behind us. This brought core bond yields down, supporting the performance of risky assets. The mood changed in February as strong employment figures and persistently high inflation led markets to raise their estimate for terminal rates. Against this backdrop, sovereign bond yields climbed, and equity markets corrected, except in Europe where growth prospects brightened as gas prices fell. Finally, March saw the appearance of stress within the US banking sector leading to wild swings in markets and violent risk-on and risk-off moves.

In terms of equity behavior, sectors like tech and consumer discretionary led the markets while energy posted a negative performance. Indeed, lower rates and recession fears have allowed high valuation/long duration stocks to make a come-back after a very negative 2022 year. On the contrary, recession fears in the US and in Europe have weighed on oil.

How did we fare in this context?

Carmignac Investissement recorded a solid positive performance over the period, above its reference indicator. Its positive performance can be mostly ascribed to a good stock picking.
Stocks within the Consumer Discretionary (Hermès) and Info Tech (AMD, Palo Alto, Microsoft) sectors are among the biggest contributors. Our selection of long-cycle industrial stocks also supported the performance with companies like Airbus and Safran. However, our exposure to the defensive Healthcare sector weighed on performance.

Outlook

Our main scenario for the coming months remains that the US will enter recession in H2 2023, leading to earnings downgrade but also lower interest rates and inflation. In Europe, the willingness of the ECB to bring inflation down to 2% sooner rather than later means that a tight monetary policy will continue to be a headwind for growth. Meanwhile, China remains desynchronized from the rest of the world and hence a silver lining of this cloudy outlook.

Given this environment, our investment strategy advocates for a selective and diversified approach to portfolio construction. To achieve our objectives, we rely on a growth-oriented strategy anchored in identifying strong opportunities balanced by core holdings in recession-resistant companies.

We notably seek to take advantage of the reopening of China through domestic companies such as Alibaba, as well as European luxury brands like Hermès and LVMH.

Furthermore, we prioritize investment opportunities related to digitalization, especially those companies levered to the explosion of Artificial Intelligence, in the software/cloud infrastructure space (Microsoft, Oracle) and the semi-conductor space (AMD, Nvidia). Cybersecurity (Palo Alto) is another software opportunity, as is the disruption of the payment/banking sector (Block).

We also have significant exposure to recession-resistant sectors such as healthcare, consumer staples, and long-cycle industrial companies (aerospace).

In line with our investment philosophy, we embrace a diversified approach to commodities, investing in both metals relating to electrification like copper (Glencore, Freeport) as well as traditional and purely renewable energy through companies such as Schlumberger (exploration technology) and Orsted.

We believe our portfolio provides investors with growth opportunities that are positioned to deliver long-term value, even in the face of economic uncertainties.

Source: Carmignac, Bloomberg, 31/03/2023
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Carmignac Investissement

A Fund geared for a changing worldDiscover the fund page

Carmignac Investissement A EUR Acc

ISIN: FR0010148981
Recommended minimum investment horizon
5 years
Risk indicator*
4/7
SFDR - Fund Classification**
Article 8

*Risk Scale from the KID (Key Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time. **The Sustainable Finance Disclosure Regulation (SFDR) 2019/2088 is a European regulation that requires asset managers to classify their funds as either 'Article 8' funds, which promote environmental and social characteristics, 'Article 9' funds, which make sustainable investments with measurable objectives, or 'Article 6' funds, which do not necessarily have a sustainability objective. For more information please refer to https://eur-lex.europa.eu/eli/reg/2019/2088/oj.

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.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.

Performance

ISIN: FR0010148981
Carmignac Investissement10.41.32.14.8-14.224.733.74.0-18.318.9
Reference Indicator18.68.811.18.9-4.828.96.727.5-13.018.1
Carmignac Investissement+ 5.4 %+ 11.3 %+ 7.0 %
Reference Indicator+ 10.0 %+ 12.3 %+ 11.1 %

Source: Carmignac at 29 Nov 2024.
​Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor).

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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.

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Investors have access to a summary of their rights in English on the following links: UK ; Switzerland ; France ; Luxembourg ; Sweden.