Fund News

Carmignac Sécurité facing Covid-19

24.03.2020

What are the main drivers of the markets?

  • The 'radical containment' measures in Europe are rising. Each of them implies significantly higher economic costs triggering sharp market sell-offs even for debts qualified as safe havens.

  • The US Federal Reserve ‘Exceptional’ measures (moves to unlimited Quantitative Easing including corporate debt for the first time) and European package (€750bn Pandemic Emergency Purchase Programme and a promise to do more if necessary) were announced to support the economy. Governments are also making progress on fiscal stimulus packages.

Even though the authorities seem to be taking the situation in hand, the uncertainties are so high (how long it will last, impact on growth...) leading to major shocks across markets.

What have we done to reduce risk in Carmignac Sécurité?

The Fund Managers have actively managed their exposure to government bonds and credit markets over the last weeks. Their one priority: reducing the risk profile of the portfolio to limit the potential drawdown in this roller-coaster period for fixed income markets.

Here are the main changes:

  • Reduced overall of interest rate sensitivity

    Increased interest rate sensitivity to core countries:

    • Neutralised our short bias on German rate.
    • Increased/maintained exposure to core rates where central banks have room to intervene such as Australia and the US.

    Reduced exposure to non-core debt:

    • Reduced our allocation to other European non-core countries (Greece, Cyprus, Slovakia, Slovenia, Portugal).
    • Active management of our Italian sovereign bonds.
  • Implemented protection on our credit book



    • Using index derivatives to hedge the riskiest part of our credit exposure.

    • Reduced allocation to subordinated financial bonds and long-maturity corporate credit bonds.

  • Increased our cash profile



    • Cash & cash equivalents stand at 25% of total assets and 50% of bonds with a maturity < 2 years.

Carmignac Sécurité

Main risks of the Fund

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.

RISK OF CAPITAL LOSS: The portfolio does not guarantee or protect the capital invested. Capital loss occurs when a unit is sold at a lower price than that paid at the time of purchase.

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.