Carmignac Portfolio Patrimoine: The Drivers Behind Its Renewed Momentum

The strength of our fixed-income approach lies first and foremost in its flexibility. With modified duration able to range from -4 to +10, the Fund does not simply have to endure rising bond yields: it can also seek to benefit from them.

Since 2022, this flexibility has become particularly important. Bonds, long regarded as the natural defensive component of a multi-assetportfolio, have once again become a source of volatility. But greater risk also creates greater opportunities for active management.

Example: 2026 — finding opportunities in a challenging bond market
Since the beginning of 2026, while several major bond indices have fallen by between 2% and 4%, Carmignac Portfolio Patrimoine’s fixed-income allocation has contributed approximately 3% to the Fund’s performance¹.

Three convictions in particular have driven this contribution. First, we believed markets were underestimating the persistence of inflation, making inflation-linked bonds an attractive way to gain exposure to a risk that was still insufficiently priced in. Second, long-term yields did not, in our view, adequately reflect the deterioration in public finances, allowing selected short positions at the long end of US and European yield curves to benefit from rising yields. Finally, not all sovereign debt offered the same risk-return profile: a short position in French government bonds combined with a long position in German government bonds enabled the Fund to seek returns from the widening spread between the two markets.

The strength of our equity approach lies in combining long-term convictions with valuation discipline. In an environment where the cost of capital is structurally higher, growth alone is no longer enough: the price paid for that growth matters.

The team therefore seeks to identify companies exposed to structural trends while analysing the entire value chain to determine where profits are being captured and where valuations remain attractive. This discipline also means adjusting exposures when the potential upside no longer sufficiently compensates for the risks.

Example: Artificial intelligence — looking beyond the major US platforms
Since 2024, investments linked to artificial intelligence have been a major driver of the equity portfolio, generating close to 8 percentage points of outperformance relative to the MSCI AC World² on their own. Rather than concentrating exposure in the major US platforms, the team has sought to identify the critical links in the AI value chain.

Companies such as TSMC, Broadcom and SK Hynix³, which have been held in the portfolio since 2024, have benefited from accelerating investment in computing power, advanced semiconductors and memory. Following the strong performance of these stocks, the team sought to further diversify its AI exposure by expanding its research into other parts of the value chain and other geographies, including selected Japanese semiconductor suppliers. The objective is to continue capturing the structural growth associated with AI while broadening the sources of performance.

The strength of active currency management lies in the ability to separate a conviction on an asset from a conviction on its currency. Being positive on a foreign company or bond does not necessarily mean wanting exposure to the underlying currency.

This flexibility can help reduce specific currency risks while also allowing the Fund to take active positions when differences in growth, monetary policy or valuations create opportunities.

Example: 2025 — staying invested in the US without taking the same level of dollar risk
In 2025, the US dollar lost around 12% against the euro. The Fund nevertheless maintained strong convictions in a number of US companies while significantly reducing its exposure to their currency. This underweight position in the dollar partly reflected the team’s concerns about the currency’s traditional safe-haven role in an environment where some of the uncertainty was originating from the US itself. It helped limit the negative impact of dollar weakness on US holdings.

At the same time, positions in several emerging-market currencies, particularly in South America, provided an additional source of return. Active currency management therefore served both to hedge risk and to express genuinely diversifying investment views.

The strength of our equity macro management lies in its ability to separate long-term convictions from the level and type of risk we want to take in the short term. Through futures, options and volatility strategies, the team can rapidly adjust net equity exposure within a range of 0% to 50%. But its role is not limited to reducing risk. Equity macro management can also be used to rapidly reintroduce market beta, express a tactical view on a market, sector or factor, or temporarily complement exposures that are underrepresented in the underlying stock portfolio.

It is therefore an asset-allocation tool in its own right, enabling the team to adapt the equity portfolio rapidly as the market regime evolves.

Example: April 2025 and the tariff shock
US tariff announcements triggered a correction of close to 20%, followed by a rebound of almost 15% within a month. Ahead of the shock, the portfolio held index puts and VIX options, which enabled the team to rapidly reduce net equity exposure to as low as 17% and limit the maximum drawdown to -5.4%.

When the VIX subsequently approached 60, the team considered the risk-reward profile to have become extremely favourable. Some of the protection was monetised and equity exposure was gradually rebuilt. Macro management therefore enabled the portfolio to respond to two very different market phases without having to reconsider the fundamental convictions held.