Carmignac has launched its latest fund, Carmignac Portfolio Inflation Solution to investors across Europe. This follows a successful period in the Carmignac Lab, where new products are incubated using internal capital ahead of launch to external clients.
Carmignac Portfolio Inflation Solution aims to deliver a positive return over inflation on a five-year horizon. It intends to offer diversification to traditional allocation in the context of a possible return of a cyclical inflationary regime, driven by evolving demographics, geopolitical and global trade trends. This new macro regime, which the co-fund managers believe started in 2021, is expected to unfold in successive waves and, in their view, should have some material investment and asset allocation consequences. Notably, interest rate-sensitive assets are likely to be intermittently weakened via an expected upward trend in rates over the coming years. The team concludes this environment will call consensus trades into question.
The fund is diversified, investing across asset classes, including commodities, with the aim of outperforming inflation across the cycle. Managed by an experienced team of Carmignac cross-asset fund managers, Frédéric Leroux, Christophe Moulin and Pierre-Edouard Bonenfant, the fund adopts a three-stage investment process.
Firstly, the core multi-asset allocation is constructed to reflect the managers’ strategic vision of the evolving inflation landscape. Secondly, the fund is permanently exposed to future inflation through the use of inflation swaps. Finally, the team manages tactical cross-asset positions to take advantage of short- to medium-term market opportunities. This flexibility allows the managers to soften, amplify or diversify the core portfolio’s performance drivers depending on the position of inflation in its cycle and to enhance return potential. The result is a strategy that is adaptive to a more volatile inflationary environment, alternating between periods of rising prices and disinflation.
Since its launch in the Carmignac Lab in December 2023, the fund has generated a return of 15.27% compared to 3.25% for the reference indicator.1
Frederic Leroux, fund manager and head of cross asset comments:
“After several decades of disinflation, major structural trends that influence long-term prices have simultaneously reversed, ushering in a new era of persistent, cyclical inflation. With a markedly different investment environment, active management with tactical flexibility is required to take advantage and manage the risks of inflation in all phases of its cycle. Carmignac Portfolio Inflation Solution has been designed with precisely this in mind. We prioritise diversification that allows us to challenge the consensus and move away from markets that have long benefited from low inflation towards often neglected markets and assets.”
Carmignac Portfolio Inflation Solution is registered in Austria, Belgium, France, Germany, Italy, Luxembourg, Portugal, Spain and Switzerland.
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