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Carmignac Patrimoine: 2022 end of summer update
YTD Performance Review
Escalating concerns that central banks' efforts to tackle inflation by hiking rates will trigger a global recession has been the main topic for markets over the last months and this should remain relevant for several months.
Therefore, the global portfolio construction has remained highly cautious since the beginning of the year
- Average equity exposure: 16%
- Average modified duration: 1.6
- Average cash exposure 24%.
Over the summer, this under-exposure to risky assets did not allow us to benefit from the rebound in equity/credit market. This market rebound led by a reversal in market participants’ sentiment is more likely to be a bear market rally rather than a change of environment.
Indeed, in late August, in response, central bankers reminded the markets that they would not be changing the course of monetary tightening any time soon.
More broadly, since the beginning of the year, Carmignac Patrimoine A EUR Acc lost -11.48% underperforming the -5.18% drop in its reference indicator¹. The negative absolute and relative performance has been fuelled by:
Notable portfolio moves
Over the last months, the objective has been to continue derisking the portfolio. Either by increasing the hedges or by buying resilient companies able to survive in a stagflation environment.
-
NEW POSITIONS/ REINFORCEMENT
- Defensive companies to solidify the portfolio construction – Nestlé, Catalent
Cloud/Software for their attractive and recurring revenue streams profile & lower valuations – Oracle
Credit protection
- USD exposure as growth momentum is in favor of the US & term of trades are in favour of the euro
-
POSITIONS SOLD/ REDUCED
- Cyclical names as recession risk is rising (Volkswagen)
- Banks as rising rates will turn from a tailwind to banks to a headwind as retail and wholesale losses begin to pick-up (Lloyd, BNP Paribas)
- EM debt due to recession risk and tightening monetary policy (Brazil)
- Businesses sensitive to advertising (Google/Meta)
Outlook
Implementation of our macro-economic scenario within our portfolio
In line with our house view, the portfolio is built to face a global stagflation scenario. While putting a strong emphasis on risk management, this environment should offer several investment opportunities for active management that could support the absolute performance.
Here are the main investment themes at play in the portfolio currently:
What to expect in terms of performance over the next months?
Despite putting a strong emphasis on risk management, we have several performance drivers for the following months:
Most of the underperformance YTD has been driven by a temporary under-performance of some of our long-term convictions. Therefore, discrepancies between fundamentals and valuations offer room for a catch-up in some of convictions i.e. energy and financial credit, stocks in consumer and tech sectors.
Net long equity exposure (20%) driven by health care, energy, consumption exposure
High carry of the credit portfolio (YTM 4%)
Long dollar position (directional and carry) (61%)
Our cash will be deployed to rebuild some long-term return potential in both equity and fixed income markets as soon as market conditions improve (23%)
Positioning
![Carmignac](https://carmignac.imgix.net/uploads/article/0001/18/2022-09_FN_Fund-CP-%28Pro%29.png?auto=format%2Ccompress)
Portfolio composition may change over time.
Source: Carmignac, 31/08/2022
Carmignac Patrimoine A EUR Acc
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
2024 (YTD) ? Year to date |
|
---|---|---|---|---|---|---|---|---|---|---|---|
Carmignac Patrimoine A EUR Acc | +8.81 % | +0.72 % | +3.88 % | +0.09 % | -11.29 % | +10.55 % | +12.40 % | -0.88 % | -9.38 % | +2.20 % | +6.99 % |
Reference Indicator | +15.97 % | +8.35 % | +8.05 % | +1.47 % | -0.07 % | +18.18 % | +5.18 % | +13.34 % | -10.26 % | +7.73 % | +6.62 % |
Scroll right to see full table
3 Years | 5 Years | 10 Years | |
---|---|---|---|
Carmignac Patrimoine A EUR Acc | -1.24 % | +2.49 % | +1.82 % |
Reference Indicator | +2.61 % | +5.02 % | +6.39 % |
Scroll right to see full table
Source: Carmignac at 31/07/2024
Entry costs : | 4,00% of the amount you pay in when entering this investment. This is the most you will be charged. Carmignac Gestion doesn't charge any entry fee. The person selling you the product will inform you of the actual charge. |
Exit costs : | We do not charge an exit fee for this product. |
Management fees and other administrative or operating costs : | 1,51% of the value of your investment per year. This estimate is based on actual costs over the past year. |
Performance fees : | 20,00% max. of the outperformance once performance since the start of the year exceeds that of the reference indicator and if no past underperformance still needs to be offset. The actual amount will vary depending on how well your investment performs. The aggregated cost estimation above includes the average over the last 5 years, or since the product creation if it is less than 5 years. |
Transaction Cost : | 0,63% of the value of your investment per year. This is an estimate of the costs incurred when we buy and sell the investments underlying the product. The actual amount varies depending on the quantity we buy and sell. |
Carmignac Patrimoine A EUR Acc
Recommended minimum investment horizon
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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.
INTEREST RATE: Interest rate risk results in a decline in the net asset value in the event of changes in interest rates.
CREDIT: Credit risk is the risk that the issuer may default.
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.
The Fund presents a risk of loss of capital.