Carmignac P. Credit: Letter from the Fund Managers
Carmignac Portfolio Credit was up 1.80% during the first quarter of 2025 vs. 0.27% for the reference indicator, for an outperformance of 1.53%. This is a satisfying performance in a turbulent quarter during which credit markets went sideways.
Review of Q1 2025 performance
The biggest contributor to performance was an investment in a restructuring situation in the healthcare industry which was a detractor to performance in 2024. Our investment thesis is starting to play out and we expect further performance during 2025. As we wrote in our 2024 annual letter in January, it is in the nature of special situations and restructuring to be more volatile but this is also a corner of the credit markets where experienced investors can harvest a lot of alpha.
The rest of the portfolio performed well during the quarter and outperformed meaningfully the reference indicator on its own. This performance was the result of consistent bond picking across a diversified portfolio of more than 250 bonds from more than 150 issuers and was achieved while maintaining a defensive stance, with a level of hedging through HY CDS indices above 21%. Despite this quarter’s volatility, the hedging position resulted in a small loss but we expect it to protect the portfolio in the future and to give us precious dry powder to reposition the fund through periods of market volatility.
Outlook
We are currently going through a period or heightened uncertainty, which does not only manifest itself through changes of expectations about the cycle or the general strength of the global economy but also at the microeconomic level, especially with an elevated risk of trade disruptions for specific industries and companies.
Trade disruptions have featured prominently in recent crises, be it in 2018 or 2022. We always stress-test our investment theses for risky dependences to unreliable markets on the demand or supply side, as well as the capacity to absorb input cost volatility. We have been investing constantly in the natural resources sector over the past decade, generating alpha regularly. The ability to withstand commodity price volatility is a key criteria selection for our positions in this corner of the economy. The financial institutions we invest in combine healthy liquidity and capitalization as well as disciplined underwriting and should withstand a recession without major issues. Finally, our CLO exposure stands at c. 8.5%, a mutli-year low for the fund. We have actively selected CLO tranches with more defensive risk characteristics, namely instruments with shorter spread duration and/or high coupons, and our exposure is well diversified across over 45 tranches.
Thus, we believe the credit worthiness of our portfolio investments should remain fundamentally resilient throughout this period and the cost of risk, on average, should stay at moderate levels. The high level of diversification of the fund should mitigate the impact of accidents. We also believe headlines, overreactions and volatility are likely to be a big source of opportunities.
In the past days, high yield spreads have widened substantially, while still remaining far from the wides typically observed near the bottom of credit cycles. Primary markets look closed for now, especially for new or more difficult situations. Complexity premia in general have reinflated, which is great news for us, and it is easier than a few months ago to find attractive risk-rewards. We have started after the end of the quarter to monetize our hedging position. We will continue if spreads continue to widen and will reallocate the proceeds towards attractive opportunities.
As we write, the portfolio sports a 7.0% yield for an average rating of BBB-. Including the cost of hedging, the net yield is in excess of 6.3% with an average robust investment grade rating. We think this is an attractive level of carry that should ensure solid outcomes within our investment horizon in a wide range or market scenarios. If the current turbulence turns into a dislocation, the carry should mitigate to a great extent a repricing of the portfolio with a 12 months horizon, giving us leeway to reposition. Conversely, in a stable to tightening market, one could easily envision a mid to high single digit return.
Finally, we expect restructurings to be an incremental source of alpha in tough markets making refinancings more difficult. Companies that overlevered during the decade of very low cost of capital preceding 2022 are increasingly having to resize and restructure their balance sheets. This has started already in 2024, with a number of companies managing to take semi-consensual routes to liability management exercises. We expect 2025 to see more proper restructurings as it is becoming more and more difficult for a number of companies to kick the can down the road and we can think of a number of large balance sheets where investors are likely too complacent about the magnitude of adjustments needed to get to sustainable quanta of debt. This should provide us with asymmetric opportunities to generate meaningful alpha, as distressed debt can be one of the most attractive sectors of the credit world at the right moments of the cycle.
In conclusion, we think our selective bond picking, high level of diversification and prudent positioning should help us weather rough credit markets and put us in the position to seize on the resulting opportunities.
Carmignac Portfolio Credit
Carmignac Portfolio Credit A EUR Acc
- Empfohlene Mindestanlagedauer
- 3 Jahre
- Risikoskala*
- 2/7
- SFDR-Klassifizierung**
- Artikel 6
*Die Definition der Risikoskala finden Sie im KID/BIB (Basisinformationsblatt). Das Risiko 1 ist nicht eine risikolose Investition. Dieser Indikator kann sich im Laufe der Zeit verändern. **Die Offenlegungsverordnung (Sustainable Finance Disclosure Regulation - SFDR) 2019/2088. Die SFDR-Klassifizierung der Fonds kann sich im Laufe der Zeit ändern.
Hauptrisiken des Fonds
Kosten
- Einstiegskosten
- 2,00 % des Betrags, den Sie beim Einstieg in diese Anlage zahlen. Dies ist der Höchstbetrag, der Ihnen berechnet wird. Carmignac Gestion erhebt keine Eintrittsgebühr. Die Person, die Ihnen das Produkt verkauft, teilt Ihnen die tatsächliche Gebühr mit.
- Ausstiegskosten
- Wir berechnen keine Ausstiegsgebühr für dieses Produkt.
- Verwaltungsgebühren und sonstige Verwaltungs- oder Betriebskosten
- 1,20 % des Werts Ihrer Anlage pro Jahr. Hierbei handelt es sich um eine Schätzung auf der Grundlage der tatsächlichen Kosten des letzten Jahres.
- Erfolgsgebühren
- 20,00 % wenn die Anteilsklasse während des Performancezeitraums den Referenzindikator übertrifft. Sie ist auch dann zahlbar, wenn die Anteilsklasse den Referenzindikator übertroffen, aber eine negative Performance verzeichnet hat. Minderleistung wird für 5 Jahre zurückgefordert. Der tatsächliche Betrag hängt davon ab, wie gut sich Ihre Investition entwickelt. Die obige aggregierte Kostenschätzung enthält den Durchschnitt der letzten 5 Jahre oder seit der Produkterstellung, wenn es weniger als 5 Jahre sind.
- Transaktionskosten
- 0,23 % des Werts Ihrer Anlage pro Jahr. Hierbei handelt es sich um eine Schätzung der Kosten, die anfallen, wenn wir die Basiswerte für das Produkt kaufen oder verkaufen. Der tatsächliche Betrag hängt davon ab, wie viel wir kaufen und verkaufen.
Performance
| Carmignac Portfolio Credit | +1,8 | +8,2 | +10,6 | −13,0 | +3,0 | +10,4 | +20,9 | +1,7 | +1,8 |
| Referenzindikator | +0,3 | +5,7 | +9,0 | −13,3 | +0,1 | +2,8 | +7,5 | −1,7 | +1,1 |
| Carmignac Portfolio Credit | +4,1 % | +6,8 % | +5,5 % |
| Referenzindikator | +1,8 % | +2,3 % | +1,2 % |
Quelle: Carmignac Stand 31. Mär 2025.
Datum des ersten NAV : 31/07/2017.
Die Wertentwicklung der Vergangenheit ist keine Garantie für die zukünftige Wertentwicklung. Sie verstehen sich nach Abzug von Gebühren (außer eventuellen Ausgabeaufschlägen, die von der Vertriebsstelle erhoben werden).
Bei den nicht währungsgesicherten Anteilen kann die Rendite aufgrund von Währungsschwankungen steigen oder fallen (bei Aktien, die nicht gegen das Währungsrisiko abgesichert sind).
Referenzindikator: 75% ICE BofA Euro Corporate Index + 25% ICE BofA Euro High Yield index. Häufigkeit der Neugewichtung: Quartalsweise