Carmignac Emergents - Quarterly Letter from Fund Managers

  • +3.2%
    Relative performance of Carmignac Emergents A EUR Acc

    versus its reference indicator MSCI Emerging Markets NR Index.

  • 20.3%
    Of the current portfolio

    is invested energy transition and renewable industries.

  • 72.0%
    Exposure of Fund

    to companies aligned with SDGs and sustainable themes.

Carmignac Emergents1 was down –2.39% in the third quarter, compared with a –5.63% decline in its reference indicator. 2Year-to-date, the fund has delivered a performance of –16.83%, versus –15.44% for its indicator. During the third quarter, emerging-market equities continued the slide that started in early 2021. They underperformed their developed market counterparts by a large margin in what is looking more and more like a capitulation by investors in the main Asian markets – China, South Korea, and Taiwan.

What happened in emerging markets in Q3 2022?

After a surprising rebound in Q2, Chinese stocks changed course this summer and resumed their downward trend, undermined by the effects of Beijing’s zero-Covid policy. This policy is standing in the way of any real economic recovery because it’s sapping consumer and business confidence and preventing the stimulus to have the intended effect on the economy. The government could start to ease this policy after the Communist Party Congress in mid-October, but we doubt it will be revoked before winter is over. Our Chinese holdings (37% of the Fund’s assets at 30 Sept. 2022) are oriented mainly towards non-cyclical sectors and long-term growth themes. The performance of Chinese stocks in the coming months will be shaped largely by the outcome of negotiations under way in Hong Kong between the US Securities and Exchange Commission (SEC) and the Chinese market regulator, which has been asked to provide the SEC with access to Chinese companies’ audit papers. A preliminary agreement was reached in August – rather unexpectedly, since analysts still believed New York-listed Chinese companies would have to start delisting in 2023. We think a final agreement could be announced in December, which would restore investor confidence in Chinese equities after two bleak years for this asset class. Barring such an agreement, Chinese stocks will probably remain under pressure until next June, when Alibaba is expected to join the Stock Connect programme, enabling investors in mainland China to buy its shares listed in Hong Kong. Chinese households have built up considerably more savings than those in the United States, which will provide new investor base for the Chinese companies listed in Hong Kong.

A positive surprise in the third quarter came from Latin America. Our Brazilian holdings (13% of the Fund’s assets) scored early gains ahead of the first round of presidential elections, with most polls pointing to a Lula victory. Investors seemed happy with this expected result, given that his choice for vice president, Geraldo Alckmin coming from a centrist party. But what really helped investors sentiment is the expectations regarding the regional elections, that pointed the likelihood of a right-wing majority in the Congress. The Congress is a powerful institution in Brazil and will likely block any attempt by the new elected President to walk back the privatisation of Eletrobras – a key reform of the Bolsonaro government. Our Mexican investments (5% of the Fund’s assets) also contributed to our outperformance in Q3. Mexican companies are benefitting from a structural trend towards nearshoring. With geopolitical tensions high between the US and China, and with firms around the world reconfiguring their global supply chains, Mexico is the country that stands to see the biggest increase in exports to regional markets. The International Bank for Reconstruction and Development estimates that Mexican exports could swell by $35.3 billion over the next three years. We hold Banorte in our portfolio; the rising interest rates are a boon to this Mexican bank since most of its loan book consists of variable-rate issues, and it’s in talks to acquire Citigroup’s Banamex subsidiary at a low valuation.

Adjustments and current positioning

We stepped up our exposure to South Korea (16% of the Fund’s assets) in the third quarter, now that valuations (measured by Price/Earnings ratios) in the country have become very attractive after an abysmal 18 months. South Korean stocks were the first to price in a sharp global recession – and we believe they’ll be the first to bounce back. We also increased our exposure to Brazil by buying stock in Eletrobras, Latin America’s biggest power utility company. 98% of the electricity it produces comes from renewable sources – specifically hydro, solar, and wind power – making it one of the world’s leading renewable energy suppliers and helping to give Brazil the second-highest country rating for its energy mix. What’s more, corporate governance at Eletrobras is now excellent thanks to changes made when it was privatised. Our analyses and the company’s most recent earnings releases show that it’s priced very attractively, offering a return of 13% (after inflation), or some 18% nominally, over the lifetime of its concessions.

We’re still cautious on India since valuations in the country appear stretched and its economy is highly vulnerable to rising energy prices. Both its stock market and its currency could fall – but that would give us attractive entry points for shoring up our Indian holdings.


Socially responsible investment is central to our approach

Since its inception in 1997, Carmignac Emergents has combined what we consider our emerging-market DNA since 1989 with our commitment to strengthening our credentials in socially responsible investment. In welding together those two areas of expertise, we aim to add value for our investors while having a positive impact on society and the environment.

Classified as an Article 9 fund under the Sustainable Finance Disclosure Regulation (SFDR)4 and was awarded France’s SRI label in 2019 and Belgium’s Towards Sustainability label in 20205


Classified as an Article 9 fund under the Sustainable Finance Disclosure Regulation (SFDR) and was awarded France’s SRI label in 2019 and Belgium’s Towards Sustainability label in 2020

As an Article 9 Strategy, the Fund will invest mainly in shares of emerging companies that have a positive outcome on environment or society and derive the majority of their revenue from goods and services related to business activities which align positively with SDGs. This sustainable objective will be measured and monitored by the percentage of revenues aligned with UN Sustainable Development Goals (SDGs)6 .

Our portfolio is currently structured around 4 major socially responsible investment (SRI) themes that are central to our process:

Fund positioning as of 30/09/2022


As a reminder, our socially responsibility approach is based on three pillars:

  • Invest selectively and with conviction, giving priority to sustainable growth themes in underpenetrated sectors and countries with sound macroeconomic fundamentals.

  • Invest for positive impact, favouring companies that deliver solutions to environmental and social challenges in emerging markets and reducing our carbon imprint by at least 30% relative to the MSCI Emerging Markets Index. Our sustainable objective is: >50% Fund’s AUM invested in companies with >50% revenue derived from goods and services positively aligned with at least 1 of 9 targeted United Nations Sustainable Development Goals.

  • Invest sustainably by consistently incorporating environmental, social and governance (ESG) criteria into our analyses and investment decision.

1Carmignac Emergents A EUR Acc (ISIN : FR0010149302). * Risk Scale from the KIID (Key Investor Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time. 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). Performance in euros as of 30/09/2022.
2 Reference indicator: MSCI EM NR USD (Reinvested net dividends rebalanced quarterly). From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. Carmignac, Bloomberg, company data, EM Advisors Group, CICC, JPM Research, 30/09/2022.
Carmignac, Company data, 30/09/2022. Carmignac's portfolios are subject to change at any time.
3The proprietary ESG system START combines and aggregates market leading data providers ESG indicators. Given the lack of standardisation and reporting of some ESG indicators by public companies, not all relevant indicators can be taken into consideration. START provides a centralised system whereby Carmignac’s proprietary analysis and insights related to each company are expressed, irrespective of the aggregated external data should it be incomplete. For more information, please refer to our website.
4 The EU Sustainable Finance Disclosure Regulation (SFDR) 2019/2088 “lays down harmonised rules on the provision of sustainability-related information with respect to financial products”. For further information, see
5Carmignac Emergents and Carmignac P. Emergents both obtained the French and Belgian SRI labels. ; ;
650% of the Fund’s AUM* is invested in companies that derive more than 50% of their revenues from business activities that are positively aligned with at least 1 of the 9 Sustainable Development Goals selected for this Fund For more information please visit
Carmignac as at 30/09/2022. 1Carmignac Emergents A EUR Acc (ISIN : FR0010149302). Reference indicator: MSCI EM NR USD) (Reinvested net dividends rebalanced quarterly.

Carmignac Emergents

Grasping the most promising opportunities within the emerging universe

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Carmignac Emergents A EUR Acc

ISIN: FR0010149302
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 (YTD)
Year to date
Carmignac Emergents A EUR Acc -6.17 % +5.76 % +5.15 % +1.39 % +18.84 % -18.60 % +24.73 % +44.66 % -10.73 % -15.63 % +3.80 %
Reference Indicator -6.81 % +11.38 % -5.23 % +14.51 % +20.59 % -10.27 % +20.61 % +8.54 % +4.86 % -14.85 % +1.54 %

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3 years 5 years 10 years
Carmignac Emergents A EUR Acc +5.13 % +3.41 % +3.60 %
Reference Indicator +2.16 % +0.92 % +3.66 %

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​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 28/02/2023

Entry costs : 4,00% of the amount you pay in when entering this investment. This is the most you will be charged. 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, but the person selling you the product may do so. 
Management fees and other administrative or operating costs : 1,97% 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 : 0,50% 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 Emergents A EUR Acc

ISIN: FR0010149302

Recommended minimum investment horizon

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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.

EMERGING MARKETS: Operating conditions and supervision in "emerging" markets may deviate from the standards prevailing on the large international exchanges and have an impact on prices of listed instruments in which the Fund may invest.

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.

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

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 decision to invest in the promoted fund(s) should take into account all its characteristics or objectives as described in its prospectus. The Funds’ prospectus, KIDs, NAV and annual reports are available at, 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: Hamilton Centre, Rodney Way, Chelmsford, England, CM1 3BY; 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, 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