Carmignac

Carmignac Portfolio Emerging Discovery: Letter from the Fund Managers

  • +4.3%
    Performance of Carmignac Portfolio Emerging Discovery A EUR Acc

    over the second quarter of 2023

  • +7.2%
    Carmignac Portfolio Emerging Discovery’s

    year-to-date performance

  • 1ˢᵗ
    Carmignac Portfolio Emerging Discovery

    is ranked 1st quartile for its volatility within its Morningstar Category over 1 and 5 years period

Carmignac Portfolio Emerging Discovery (A EUR ACC share class, ISIN LU0336083810 1) returned +4.30% during the second quarter of 2023 versus +4.18% for its reference indicator 2, taking its year-to-date performance to +7.23% versus +5.87% for its reference indicator. Additionally, the Fund was categorized as Article 8 under the European Sustainable Finance Disclosure Regulation (SFDR) with more than 50% of investments of the fund recognized as ‘sustainable’ and contributing to United Nations Sustainable Development Goals.

Quarterly Performance Review

During the second quarter of 2023, most major markets delivered positive absolute returns. The fund’s holdings in India and Brazil delivered market beating returns while our holdings in Korea and Taiwan lagged their country benchmarks. The fund’s holdings in the semiconductor supply-chain benefited from the rush to own businesses with exposure to Artificial Intelligence (AI).

The macroeconomic outcomes in first half of this year have generally caught the markets by surprise. The US consumer has turned out to be a lot more resilient while growth in China has disappointed. Our portfolio is not constructed with any specific macroeconomic outcome in mind. We remain focused on owning quality businesses which can compound growth significantly over many years to come. The Emerging Markets universe provides us ample opportunities to do so across geographies and sectors. We place a high bar on management teams we invest with and prefer businesses that generate sufficient cash-flows to fund their own growth. Due to this our portfolio tends to be more defensive compared to the reference indicator. But we also do not shy away from investing in businesses and countries that may be out of favour as long as we have conviction in the medium to long term outlook. A case in point has been our investments in Vietnam.

Fund positioning

Vietnam’s fast-growing economy is creating a lot of attractive investment opportunities. Yet it is extremely difficult for foreigners to invest in Vietnam. Over the past few quarters, we have increased the fund’s holdings of FPT Corp. FPT is one of the most respected technology companies in Vietnam. Founded by Mr. Truong Gia Binh three decades ago, FPT now has two main businesses: offshore IT Services and domestic broadband. India dominates offshore IT Services for North America and Europe. FPT has carved a niche for itself by focusing on customers in Japan. They are now expanding into the other developed markets. FPT also started Vietnam’s first private university in 2006 and the education business continues to train a large number of skilled professionals for Vietnam’s rapidly expanding information technology industry. Last year, Vietnam’s markets were rocked by a crisis in the domestic bond market which was mainly linked to the real estate sector. We saw the ensuing sell-off as an opportunity to own more of FPT. We continue to look for similar opportunities in all our markets to own good quality business that have a long runway for growth.

Outlook

India remains our heaviest regional weighting and is an excellent market in which to find long-term growth stocks, but we also have to be careful with high valuations at a time when many developed countries are coming out of the very low interest rate environment of the previous decade. The fund continues to have a good mix of defensive holdings though investments in predictable return companies such as the Brazilian transmission utility company Alupar, that benefits from growing infrastructure demand with guaranteed regulated returns or Fibra Terrafina, one of the key players in Mexico’s industrial real estate market, benefitting from the secular trend of Nearshoring.

Going forward, we expect heightened macroeconomic uncertainty to continue during the rest of 2023. But we also expect 2024 to mark the start of the new phase of growth for themes such as industrial automation, AI and semiconductors. We continue to review our current portfolio and new ideas to ensure we concentrate the portfolio in the highest conviction holdings for 2024 and beyond.

1 Performance of the A EUR acc share class ISIN code: LU0336083810. 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). From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested.
2 50% MSCI EM SmallCap (EUR) + 50% MSCI EM MidCap (EUR) (Reinvested net dividends rebalanced quarterly).

Carmignac Portfolio Emerging Discovery

Crossing frontiers to discover small and mid-cap gems

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Carmignac Portfolio Emerging Discovery A EUR Acc

ISIN: LU0336083810

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.

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.

The Fund presents a risk of loss of capital.

Carmignac Portfolio Emerging Discovery A EUR Acc

ISIN: LU0336083810
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (YTD)
?
Year to date
Carmignac Portfolio Emerging Discovery A EUR Acc +13.12 % +2.99 % +3.76 % +17.91 % -8.90 % +9.98 % -0.16 % +25.55 % -22.39 % +12.66 % +2.99 %
Reference Indicator +12.98 % +0.19 % +6.67 % +18.14 % -11.64 % +14.39 % +5.35 % +21.27 % -11.67 % +14.93 % -1.46 %

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3 Years 5 Years 10 Years
Carmignac Portfolio Emerging Discovery A EUR Acc +3.05 % +2.91 % +5.14 %
Reference Indicator +6.49 % +6.65 % +6.56 %

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Source : Carmignac at 31/01/2024 .

Maximum subscription fees paid to distributors : 4,00%
Redemption Fees : 0,00%
Ongoing Charges : 2.30%
Conversion Fee : 1%
Management Fees : 2,00%
Performance Fees : 20,00%
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Marketing communication. Please refer to the KID/KIID, 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. 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 Funds’ prospectus, KIDs, NAVs and annual reports are available at www.carmignac.com, 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.

  • In France, Luxembourg, Sweden: 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 Funds’ prospectus, KIDs, NAV and annual reports are available at www.carmignac.com, or upon request to the Management.

  • 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.

  • In Switzerland: the prospectus, KIDs and annual report 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, 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.