Equity strategies

FP Carmignac Emerging Markets

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Comments from the Investment Team

Read the Investment team's analysis below.

FP Carmignac Emerging Markets Monthly comments

Data as of:  28 Jun 2024.
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

  • The MSCI EM index in EUR gained 5.3% in June as Taiwanese and Korean technology companies involved in the AI revolution rallied, and Indian stocks were strong after national elections.
  • Latin American markets were down, with Mexico declining after election results, and Lula spooking the markets amid fears of a deterioration in public finances in Brazil.
  • Chinese markets backtracked on the previous weeks’ rally due to gloomy economic data and concerns about the US elections.

Performance Commentary

  • The Fund delivered a positive return but significantly lagged its reference indicator.
  • This underperformance mainly stemmed from our high exposure to Latin America,
  • and to the disappointing performance of our Chinese holdings, despite solid fundamentals and decent results. We took profits on stocks that had performed well, such as New Oriental, but this was not enough.
  • Our overexposure to Mexico and Brazil weighed on performance as these markets trailed global EM indices.
  • However, our Taiwanese and Korean technology stocks (TSMC and Hyundai) and our Indian holdings (ICICI Lombard) rose significantly.

Outlook and Investment Strategy

  • Emerging market economies should benefit from long-term structural trends: artificial intelligence, nearshoring and the new commodities supercycle.
  • We continue to hold a concentrated yet balanced portfolio of quality stocks that either offer good visibility (Asian tech, India) or are trading at very attractive valuation levels (China, Mexico, Brazil).
  • We added two new Taiwanese positions to our portfolio during the month to make up for our underweighting of the country and diversify our exposure to the AI value chain: Elite Material and Lite-On.
  • We remain confident about our current portfolio and top ten positions, feeling relaxed about their fundamentals, governance and valuations.
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.

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