Carmignac Portfolio Patrimoine

This month has seen an erosion of American exceptionalism.

Uncertainties surrounding the policies of Trump 2.0 have weighed heavily on the morale of American consumers and businesses, reigniting fears about economic growth.

Concerns about stagflation and a general lack of clarity have led to a decline in US stocks, while enthusiasm for AI continues to dwindle.

Due to the lack of visibility in the United States, investors have turned their attention to other parts of the world where valuations remain low.

European equities have maintained an upward trajectory despite Trump's protectionist threats.

The positive momentum of Chinese technology stocks has driven the outperformance of emerging markets.

Across the bond markets, all main segments recorded positive yields for the month, as the decline in US rates had ripple effects on other market segments.

Lastly, the weakness of the dollar has bolstered emerging market debt.

In this context, the fund recorded a negative performance.

The selection of stocks, particularly in the technology sector, was the main contributor to this underperformance.

Persistent concerns about tariffs and the sustainability of earnings for artificial intelligence-focused stocks, such as TSMC and Synopsys, weighed on our results.

Our diversification strategies, including options on indices, the European automotive and chemical sectors, emerging banks, and the VIX, did not perform as well as expected.

Conversely, our positioning on US and emerging market rates and credit was beneficial and partially offset the decline in equities.

Finally, our exposure to the yen and Latin American currencies (MXN, BRL) also had a positive impact.

The market has revised downwards the growth outlook in the United States due to the threats posed by the Trump administration.

Given the persistent uncertainties about the evolution of US fiscal and tariff policies, as well as their implications for inflation and growth, we continue to diversify our portfolio.

Rather than reducing our exposure to equities, which remains at around 40%, we are favouring geographical and sector diversification and the purchase of protection via options.

The performance of bonds shows that they can once again serve as a diversification against the equity markets, particularly in the United States. As a result, we have increased our modified duration to US rates.

In Europe, we believe that the consensus is still too pessimistic. We therefore favour the euro over the dollar, maintain a negative modified duration to the euro zone and have increased our exposure to the continent's equities again, and maintain a substantial exposure to credit.