FP Carmignac Global Equity Compounders: Harnessing the power of time

FP Carmignac Global Equity Compounders, our sustainable investment fund focused on high-quality companies, turned 4 this year – an occasion to take a look back at its performance so far.

Published on
11 June 2024
Read time
2 minute(s) read
65%Cumulative performance since launch, compared with 74% for its reference indicator1.
4star ratingOverall Morningstar RatingTM
TopquartileThe fund ranks in the top quartile of its Morningstar category for its performance since launch2.

Sources: Carmignac, Morningstar; data for the A GBP Acc share class at 31/05/2024.
1Reference indicator: MSCI World (USD) (net dividends reinvested). 2Morningstar category: Global Large-Cap Growth Equity.

Time is an ally for…

INVESTORS

Anyone who invests in equities needs to have a long-term view. Data show that investors who keep their holdings for long periods are less likely to experience losses, thanks largely to the effect of compounding. The concept of compounding – generally thought of in terms of interest – is simple: when you place your money in an interest-bearing account, you earn interest not only on your initial investment, but also on the interest you accumulate along the way. Or in other words, the more time that passes, the more interest you’ll earn on your interest.

BUSINESSES

We target only high-quality companies with a track record of stable, high profit margins and that reinvest their earnings in future growth. Time works to the benefit of these companies, as it lets them reap the rewards of their capital investments and anchor their dominant position through innovation and R&D. Over time, their capital investments have an effect similar to that of compounded interest.

Taking Microsoft as an example, the company introduced its Azure cloud computing service in October 2008 – right in the middle of the subprime crisis. Yet five years later, Azure generated $1 billion in revenue for Microsoft and it’s now the firm’s largest revenue stream, bringing in $70 billion in 2023. With Azure, Microsoft was able to diversify its business model and create additional growth drivers by reinvesting wisely.
Source: Bloomberg, May 2024.

OUR FP CARMIGNAC GLOBAL EQUITY COMPOUNDERS FUND

As a quality-focused investor, we must be able to identify promising businesses and then be patient as they grow and develop. To that end, we use a proprietary investment process developed by Mark Denham over 20 years ago. The process acts like a compass, guiding us so that we can ensure the companies we select consistently meet our criteria.

Despite the many challenges encountered over the past five years – including the biggest sector rotation in equity markets in a decade – time has worked in our Fund’s favour. Not only have we outperformed global equities, but we’ve also made up for the decline in 2022. Our success can be attributed primarily to our patience and disciplined approach, which is reflected in the positions we’ve taken in our main long-term convictions. These companies have been in our portfolio for an average of over four years, illustrating how strongly we believe in their potential.

50% of the investments in our portfolio have been there since the Fund was launched in 2020

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. Source: Carmignac, 31/05/2024.

Examples of portfolio convictions held since 2020

Nvidia

This US-based company, initially known for its high-end graphics cards, has become a leading developer of artificial intelligence solutions.

Nvidia has gained 1,139% since it’s been in our portfolio.

Novo Nordisk

This Danish pharmaceutical company is a pioneer in its field and the world’s leading developer of diabetes treatments. We were impressed by the firm’s innovative approach to R&D, as very few companies have the explicit goal of curing the very disease that supplies most of their revenue. Yet that’s exactly what Novo Nordisk has set out to do with its Wegovy weight-loss drug.

Novo Nordisk has gained 352% since it’s been in our portfolio.

We aim to select companies that are capable of responding to tomorrow’s challenges. That’s why we not only apply financial criteria, but also make sure our investments are aligned with the United Nations Sustainable Development Goals.
[Management Team] [Author] Denham Mark

Mark Denham

Head of Equities, Fund Manager
The reference to a ranking or prize, is no guarantee of the future results of the UCIS or the manager. For more information on the methodology: Label ISR, Towards Sustainability and Mainstreet Partners.

FP Carmignac Global Equity Compounders in a nutshell

Discover the Fund’s main features and benefits through the words of the Fund ManagersWatch the video

FP Carmignac Global Equity Compounders A GBP ACC

ISIN: GB00BMGLBK75
Recommended minimum investment horizon
5 years
Risk indicator*
6/7
SFDR - Fund Classification
Article -

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

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.Liquidity: Temporary market distortions may have an impact on the pricing conditions under which the Fund might be caused to liquidate, initiate or modify its positions.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.

Fees

ISIN: GB00BMGLBK75
Maximum subscription fees paid to distributors
0,00%
Redemption Fees
0,00%
Conversion Fee

-

Ongoing Charges
0.90%
Management Fees
0,82% EXT
Performance Fees

-

Footnote

Performance

ISIN: GB00BMGLBK75
FP Carmignac Global Equity Compounders23.122.6-19.021.0
Reference Indicator19.822.9-7.816.8
FP Carmignac Global Equity Compounders+ 21.7 %+ 8.1 %+ 14.0 %
Reference Indicator+ 20.9 %+ 10.1 %+ 15.1 %

Source: Carmignac at 28 Jun 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 KIID, prospectus of the fund before making any final investment decisions.

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.

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.

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The risks, fees and ongoing charges are described in the KIID (Key Information Document). The KIID must be made available to the subscriber prior to subscription. The subscriber must read the KIID. 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.

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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 document was prepared by Carmignac Gestion, Carmignac Gestion Luxembourg or Carmignac UK Ltd. 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 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, Essex, CM1 3BY, UK; Registered in England and Wales with number 4162989. Carmignac Gestion Luxembourg SA has been appointed as the Investment Manager and distributor in respect of the Company. Carmignac UK Ltd (Registered in England and Wales with number 14162894) has been appointed as a sub-Investment Manager of the Company and is authorised and regulated by the Financial Conduct Authority with FRN:984288. The Management Company can cease promotion in your country anytime. Investors have access to a summary of their rights in English on the following link.