Equity strategies

FP Carmignac Emerging Markets

Share Class

GB00BQXJRP97

Comments from the Investment Team

Read the Investment team's analysis below.

FP Carmignac Emerging Markets Monthly comments

Data as of:  31 Jan 2025.
The Investment team
[Management Team] [Author] Hovasse Xavier

Xavier Hovasse

Head of Emerging Equities, Fund Manager
[Management Team] [Author] Li-Labbe Haiyan

Haiyan Li-Labbé

Fund Manager

Market Environment

  • Emerging markets started the year on a positive note in January, supported by a solid rally in Latin American markets, despite the sell-off in AI names following the DeepSeek news.

  • In China, economic data came in slightly lower in January vs. December for both the NBS manufacturing PMI (49.1 for January vs. 50.1 for December) and the NBS non-manufacturing PMI (50.2 for January vs. 52.2 for December). At the end of the period, Chinese markets were closed for the Lunar New Year.

  • The start of D. Trump's second term as President of the United States brought a wind of uncertainty to the markets. At the end of the period, President Trump announced tariffs of 25% on Mexico and 25% on Canada, as well as additional tariffs of 10% on Chinese goods.

  • Finally, Latin American markets ended the month higher, with the Brazilian market recovering after the strong correction in 2024. In contrast, Indian markets sold off on profit-taking after 3 years of positive performance.

Performance Commentary

  • In this context, the fund delivered a positive performance, outperforming its reference indicator.

  • The primary driver of this good performance was Taiwan Semiconductor, the global leader in the foundry industry, which reported a significant increase in fourth-quarter results and continues to benefit from strong demand for its AI chips. Additionally, South Korean company SK Hynix posted good results, further supporting our performance.

  • Despite the disruption in stock prices of companies operating in artificial intelligence due to the DeepSeek announcement, our holdings still ended the month on a positive note.

  • Our Latin American portfolio also contributed positively to the overall performance. Notably, our Brazilian holdings Eletrobras and Equatorial Energia, along with our investment in the Mexican bank Grupo Banorte, boosted the fund's performance.

Outlook and Investment Strategy

  • After a year in 2024 marked by the underperformance of emerging markets compared to US markets, we remain constructive on Emerging Equities, as we believe that current valuations reflect a pessimistic scenario.

  • We are in the view that the economic decoupling between the US and China will not have the negative consequences expected by the market. China's exports to the US in fact represent no more than 13% of total Chinese exports.

  • On the other hand, Donald Trump's protectionist policies are pushing us to adopt a measured allocation to China, with a slight underweight positioning relative to our reference indicator. Our Chinese portfolio is composed of domestic consumer companies and should therefore not be directed impacted by the potential rise in US tariffs.

  • We are maintaining a significant allocation to India, where the long-term outlook remains promising. However, tight valuations and technical factors – such as the significant capital inflows in recent years – require a more selective approach.

  • We are maintaining a significant exposure to the artificial intelligence theme. Over the month, we continued to strengthen our position in SK Hynix, the world leader in the manufacture of sophisticated HBM (High Bandwidth Memory) memory, which receives 100% of its orders from Nvidia. On the contrary, we reduced our stake in Samsung, which has fallen behind Hynix.

  • After the sharp correction in 2024, we remain constructive on our Latin American portfolio and we are maintaining our positions, particularly in Brazil. Despite the rebound in January, we believe that our Brazilian stocks are attractively valued, and notably our investments in power utility companies.

  • Over the month, we reduced our position in the Argentine bank Galicia on profit taking, after the stock's strong performance since our investment in the last quarter of 2024.

Related articles

Emerging equities7 January 2025English

Naomi Waistell to join Carmignac EM equities team

2 minute(s) read
Find out more
Emerging equities20 February 2023English

Our Fund Managers awarded for excellence

2 minute(s) read
Find out more
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.
​The information presented above is not contractually binding and does not constitute investment advice. Past performance is not a reliable indicator of future performance. Performance is shown net of fees (excluding any subscription fees payable to the distributor). Investors may lose some or all of their capital, as the capital in the UCI is not guaranteed. Access to the products and services presented herein may be restricted for some individuals or countries. Taxation depends on the situation of the individual. The risks, fees and recommended investment period for the UCI presented are detailed in the KIDs (key information documents) and prospectuses available on this website. The KID must be made available to the subscriber prior to purchase.
The information presented above is not contractually binding and does not constitute investment advice. Past performance is not a reliable indicator of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor), where applicable. Investors may lose some or all of their capital, as the capital in the UCI is not guaranteed. Access to the products and services presented herein may be restricted for some individuals or countries. Taxation depends on the situation of the individual. The risks, fees and recommended investment period for the UCI presented are detailed in the KIDs (key information documents) and prospectuses available on this website. The KID must be made available to the subscriber prior to purchase.). The reference to a ranking or prize, is no guarantee of the future results of the UCITS or the manager.