Carmignac Portfolio Emerging Discovery

Emerging markets rose sharply over the month, driven by China's solid rebound in the wake of optimism generated by Beijing's stimulus measures.

The PBOC cut interest rates, lowered reserve requirements ratio (RRR) and announced measures to support the property and equity markets, while indicating its willingness to do more on the fiscal front.

The fact that some of the measures announced are directly targeted at the market is a signal that the government is finally addressing economic issues and equity markets problems properly. The Central Bank is offering RMB 800 billion in subsidized loans to investors and companies themselves to buy equities.

In the wake of the coordinated announcements by the Chinese authorities, the Chinese equities markets rebounded strongly, making Chinese markets the best performing equity markets year-to-date.

In Latin America, Mexican markets rebounded slightly, while Brazil was down, penalized by a rise in central bank interest rates and continued weakness in agricultural commodity prices.

Against this backdrop, the fund delivered a positive performance, outperforming its reference indicator.

India, our main geographical allocation, provided strong performance for the fund. We benefited from our participation in the IPO of Premier Energies, India's second largest solar module manufacturer.

In China, the stimulus measures supported the valuations of our stocks Vipshop, Yadea and Jiumajiu.

Finally, our portfolio of Taiwanese equities disappointed slightly over the period. Fears about the potential benefits of AI penalised shares in Gold Circuit Electronics and Lotes, which operate in the semiconductor industry.

We remain constructive on emerging small and mid-cap stocks due to encouraging macro-economic indicators, particularly in Latin America and Southeast Asia, where the Fund is mainly positioned.

The vast emerging universe offers us numerous opportunities across all geographic areas and sectors. India remains our main geographic allocation and an excellent domestic market for finding long-term growth stocks.

We maintain significant exposure to stocks linked to artificial intelligence, notably companies in the semiconductor value chain in Taiwan and Korea, such as Gold Circuit Electronics and Lotes.

Given the global economic slowdown, we are striving to reduce the risks in the portfolio by increasing diversification

During the month, we participated in the IPO of Premier Energies, a specialist in the manufacture of Indian solar modules. We also initiated new Indian positions, notably in P.N Gadgil Jewellers, an Indian jewellery company, as well as in Home First Finance, a provider of financing for affordable housing.