Carmignac

Carmignac Portfolio Grande Europe: Letter from the Portfolio Manager

  • Author(s)
    Mark Denham
  • Published
  • Length
    3 minute(s) read

During the last three months of the year Carmignac Portfolio Grande Europe (A EUR Acc) recorded a positive performance of +8.64%, only moderately lagging the reference indicator, that rose by +10.82%. Despite this, 2020 overall was good for the Fund which returned +14.46% in contrast to a negative -1.99% recorded by its reference indicator.

The European Equity Market


Q4 2020 began with the prospect of several key binary events that initially contributed to a weakening of European markets. However, they quickly recovered and rallied when the effects of the first Covid-19 vaccine from Biontech-Pfizer was reported in early November. From there, European markets steadily rose over the rest of the period, bolstered by other positive vaccine news as vaccination programmes are rolled out in first half of 2021, which allowed investors to anticipate an end to the current crisis. At the end of the year, a trading agreement between the UK and the EU was finally announced but met with a muted response from investors.

These developments  - especially the vaccine news, which hopefully heralds an economic recovery in 2021 - precipitated a strong rebound in sectors that were previously weak and are a natural underweight for our strategy focused on companies with high sustainable levels of profitability. This natural bias explains the relative weakness of the Fund close to year end, which has not prevented it from recording an overall positive absolute and relative performance during the last 12 months.

In fact, we managed to offset this cyclical dynamic, to some degree, due to the investment decisions we took earlier in the year when we added several new holdings to the Fund that are more sensitive to an economic recovery

Portfolio Management

We were hit with two stock-specific events during the quarter. The first was the unexpected announcement of SAP’s management that they were embarking on a 5-year programme to convert core business customers to a cloud version of their business software.

Nevertheless, after careful consideration, we decided to maintain our holding. The other stock that was hit negatively was Kingspan  - the building materials company, and a leader in environmentally friendly insulation products  - which fell significantly on negative sentiment during the ongoing enquiry into the Grenfell Tower fire in the UK, where questionable industry practices came to light. Given Kingspan was not directly involved in the disaster, we expect limited damage to their franchise following the outcome of the inquiry later in 2021.

The portfolios of Carmignac funds may change without previous notice.\r\nSource: Carmignac, 31/12/2020

Alternatively, there were two notable additions to the Fund during the quarter: Nel, a leading manufacturer of electrolysers used in the nascent hydrogen market, which is likely to expand rapidly as countries seek to reduce carbon emissions; and Nordnet, a Nordic online savings platform which is taking market share from competitors.

Investment Outlook


As we head into 2021, the broad structure of the portfolio is unchanged due to our bottom-up stock picking process which focuses on profitable companies with high return on capital. We believe that with the rollout of the Covid vaccine underway across the continent, we can discount the end of the crisis as we return to normality. Consequently, we expect our recovery to continue to perform well and we believe we are also well placed in terms of the strong ongoing trend for environmental awareness, through Orsted (wind farms), Vestas (wind turbines), Solaria (solar farms), Kingspan (insulation), Schneider (electrical infrastructure), and Nel; and also digitisation through technology, with holdings such as SAP, Adyen (electronic payments), and ASML (semiconductors).

Discover the Fund’s webpage:


Carmignac Portfolio Grande Europe A EUR Acc

ISIN: LU0099161993
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (YTD)
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Year to date
Carmignac Portfolio Grande Europe A EUR Acc +10.32 % -1.40 % +5.11 % +10.36 % -9.56 % +34.79 % +14.46 % +21.73 % -21.09 % +14.75 % +10.00 %
Reference Indicator +7.20 % +9.60 % +1.73 % +10.58 % -10.77 % +26.82 % -1.99 % +24.91 % -10.64 % +15.81 % +8.07 %

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3 Years 5 Years 10 Years
Carmignac Portfolio Grande Europe A EUR Acc +0.36 % +8.30 % +7.17 %
Reference Indicator +4.73 % +7.53 % +6.89 %

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Source: Carmignac at 31/10/2024

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 : 1,80% 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 : 0,41% 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.

Reference Indicator: Stoxx 600 (Reinvested net dividends)
Source: Carmignac, 31/12/2020. Mark Denham joined Carmignac in mid-September 2016 as Head of European Equities, Fund Manager. Performance of the A EUR acc share class. Past performance is not necessarily indicative of future performance. The return may increase or decrease as a result of currency fluctuations. Performances are net of fees (excluding possible entrance fees charged by the distributor).


Carmignac Portfolio Grande Europe

ISIN:
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.

This document is intended for professional clients. This is an advertising document. This document may not be reproduced, in whole or in part, without prior authorisation from the management company. This document does not constitute a subscription offer, nor does it constitute investment advice. The Management Company can cease promotion in your country anytime. Investors have access to a summary of their rights in French, English, German, Dutch, Spanish, Italian on the following link:https://www.carmignac.com/en_US. Carmignac Portfolio refers to the sub-funds of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive. The Funds are common funds in contractual form (FCP) conforming to the UCITS Directive under French law.The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged. The French investment funds (fonds commun de placement or FCP) are common funds in contractual form (FCP) conforming to the UCITS Directive under French law. 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. Access to the Fund may be subject to restrictions with regard to certain persons or countries. The Fund is not registered in North America, in South America, in Asia nor is it registered in Japan. The Funds are registered in Singapore as restricted foreign scheme (for professional clients only). The Fund has not been registered under the US Securities Act of 1933. The Fund 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/or FATCA. The Fund presents a risk of loss of capital. The risks and fees are described in the KIID (Key Investor Information Document). The Fund's prospectus, KIIDs and annual reports are available at www.carmignac.com, or upon request to the Management Company. The KIID must be made available to the subscriber prior to subscription. - In Switzerland, the Fund’s respective prospectuses, KIIDs and annual reports 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, Paris, succursale de Nyon/Suisse, Route de Signy 35, 1260 Nyon. - 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 material 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). - In Spain: Carmignac Patrimoine is registered with Comisión Nacional del Mercado de Valores de España (CNMV) under number 386, Carmignac Investissement under number 385, Carmignac Sécurité under number 395, Carmignac Emergents under number 387 and Carmignac Portfolio under number 392.