Published on
23 January 2024
Read time
5 minute(s) read
+6.78%Performance of the Fund in the quarter vs +6.42% for its reference indicator1 (A EUR Share class).
+20.65%Performance of the Fund in 2023 vs +18.06% for its reference indicator.
+7.66%Performance of the Fund over 3 years vs +9.43% for its reference indicator.

During the fourth quarter of 2023, the return of Carmignac Portfolio Family Governed (A share class) was +6.8%, whereas its reference indicator, rose +6.4%, meaning that for the calendar year the fund rose +20.7%, and its reference indicator rose +18.1%.

Market environment during the period

Global equity markets had a positive year, with continued positive momentum. Initially, the positive momentum was driven by the possibility of a cessation of interest rate rises due to falling headline inflation. Later, the ongoing resilience of the US economy pushed expectations of a recession to later in the year or even into 2024. Global markets rose significantly in the final quarter responding to an unequivocally dovish message from central banks, notably the US Federal Reserve (the Fed), that inflation is now under control and that we can look forward to interest rate cuts in 2024. The S&P 500, known for its focus on growth, outperformed other major equity indices over the period, marking its best quarterly performance in three years. Throughout the year, the dominant force behind the index's returns was the 'magnificent seven' tech and artificial intelligence (AI) stocks, which accounted for approximately 80% of the overall returns.
The third quarter was dominated by rising bond yields and hawkish commentary from the Fed, which created downward pressure on Technology and Consumer Staples stocks. In the final quarter, global markets rose in response to a dovish message from central banks, with expectations of interest rate cuts in 2024, thus reversing the narrative of the prior quarter. The markets continue to be confident that central banks had completed their rate hikes, but remain cautious about the duration of restrictive interest rates and the potential impact on the stock market.

How did we fare in this context?

During the year, the Fund recorded a positive absolute and relative performance. The main performance came from stock selection. Healthcare, Industrials and Consumer Staples were the best contributing sectors to our fund.
The beginning of the year was driven by resilient consumer data in the US, falling energy prices in Europe and expectations of falling inflation. The rally was led by the Information Technology sector where we do not usually find many family governed businesses, however the two names we hold Veeva and Fortinet were among the best performers buoyed by growth, profitability and strong results.
The second quarter was very strong for our main contributors during the year. Our large holdings in Eli Lilly and Novo Nordisk, who both provide the new GLP-1 drugs to treat diabetes and obesity, continued to power ahead of the sector, rising 60% and 50% respectively during the year, driven by strong sustained growth of this class of drugs in the US and the prospect of easing supply constraints likely enabling further growth driven by obesity demand in 2024.
Even if the third quarter was dominated by hawkish commentary from the Fed creating downward pressure on stocks, dental implant company Straumann delivered strong performance rising c28% after the name delivered higher than expected sales growth in the third quarter and encouragingly maintained full year growth targets of sales and profits growth. Our Consumer Discretionary selection was also positive, and it was particularly gratifying to see Garmin rising 42% during the year and having a particularly strong Q3 driven by growing sales in Marine, Auto and Fitness products. In the last quarter, economically sensitive areas like Industrials, Commodities, and Technology performed well, along with sectors sensitive to falling rates like Utilities and Real Estate. However, our fund's structure was not aligned with this positive backdrop as we had limited exposure to technology and cyclical sectors. Additionally, our largest sectoral exposure to healthcare underperformed the market. Despite this, our fund outperformed its benchmark through successful stock selection. For example, the soft drinks distribution company Coca Cola Consolidated rose 40% over the quarter while the Consumer Staples sector overall rose only 1%.
From a cyclical standpoint, 80% of the portfolio is in less cyclical names as we have derisked our portfolio over the last couple of quarters. Our focus remains in Healthcare, Industrials and Staples which represent 40%, 15% and 12% respectively.

Outlook

We continue to keep a defensive stance with less exposure to cyclical names. Regular reviews of the corporate governance of our names remains an important feature of managing this fund. We are convinced that Family or Founder businesses if they are well managed will deliver the best returns over the long run. Thankfully our reviews have led to no major concerns, although of course we engage with many companies on specific details. However, we have been aware that a few of our names no longer exhibit the minimum level of control of 10% of the votes, as the founder or families have been reducing their stakes. Consequently, investors in the fund should expect us, over the coming months, several divestments from the current portfolio.

We maintain our systematic and long-term investment process. We invest in fundamentally high-quality companies which also have a significant family or founder shareholder to guide the company and enable long-term strategic decisions. Detailed corporate governance analysis is essential to identify the most beneficial names among this group.

1MSCI ACWI (USD) (Reinvested Net Dividends).

Carmignac Portfolio Family Governed

A global, high-conviction equity fund that invests in family companiesDiscover the fund page

Carmignac Portfolio Family Governed A EUR Acc

ISIN: LU1966630706
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.

Fees

ISIN: LU1966630706
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
1,81% of the value of your investment per year. This estimate is based on actual costs over the past year.
Performance fees
20,00% when the share class overperforms the Reference indicator during the performance period. It will be payable also in case the share class has overperformed the reference indicator but had a negative performance. Underperformance is clawed back for 5 years. 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
0,21% 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.

Annualised Performance

ISIN: LU1966630706
Carmignac Portfolio Family Governed11.216.027.0-18.620.7
Reference Indicator15.26.727.5-13.018.1
Carmignac Portfolio Family Governed+ 19.0 %+ 9.4 %+ 11.2 %
Reference Indicator+ 14.7 %+ 10.1 %+ 11.3 %

Source : Carmignac at 31 Jan 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.

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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.

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