Carmignac Portfolio Emergents: Letter from the Fund Managers - Q4 2025
During the fourth quarter, Carmignac Portfolio Emergents F EUR Acc delivered a positive performance of +5.25%, outperforming its reference indicator, which rose +4.78%. Over the full year 2025, the Fund achieved a performance of +23.61%, compared with +17.76% for the reference indicator.
As is typically the case, performance was primarily driven by stock selection, with balanced contributions across countries and sectors.
Market environment
The year 2025 stood out for the significant outperformance of Emerging Markets relative to developed markets, a notable development after more than fifteen years of relative underperformance. This trend was accompanied by a weakening of the US dollar, largely driven by decisions taken by the Trump administration. These included the adoption of a highly expansionary budget, contradicting campaign commitments made alongside Elon Musk, as well as the disorderly introduction of broad-based import tariffs in early April. Subsequent policy reversals undermined the credibility of US economic policy.
In addition, repeated attacks on the Federal Reserve raised concerns about the central bank’s independence—an issue more commonly associated with emerging economies. Against this backdrop, investors reallocated part of their assets toward Emerging Markets, and notably toward China, which had previously been widely regarded as uninvestable. 2025 marked a turning point, as markets moved beyond a narrow focus on China’s property sector to recognise its industrial leadership in strategic areas such as automotive manufacturing and artificial intelligence (AI).
Performance review
2025 was a particularly strong year for Carmignac Portfolio Emergents, driven primarily by two key factors, which we detail below: our strategic positioning in AI in Asia and our targeted exposure to Latin America.
With regard to AI, we adopted an ambitious strategy early on, allocating close to one quarter of the Fund to this theme by the end of 2025. As early as 2022, Carmignac’s equity investment team anticipated the acceleration of this new industrial revolution and its profound impact on equity markets. It is important to emphasise that this transformation cannot occur without Asia, which is present at every stage of the AI value chain — from semiconductor and memory production, to AI servers and the development of large language models.
We benefited fully from this dynamic, notably through our investment in SK Hynix (7.3% of the Fund), a pioneer in High Bandwidth Memory (HBM) used by Nvidia in its most advanced AI chips. In addition, our Taiwan exposure, representing 15.7% of the Fund, is largely centred on Taiwan Semiconductor Manufacturing Company (TSMC), a critical player holding a global monopoly in leading-edge semiconductor technologies.
Turning to Latin America, we increased our exposure last year, believing the region had been unfairly penalised by political developments that unsettled markets, including the election of Claudia Sheinbaum and her constitutional reform in Mexico, as well as fiscal slippage under President Lula in Brazil. Our investment strategy proved well-founded, supported by disciplined stock selection, currency appreciation, and strong bond market performance. This favourable environment lowered the cost of capital for Latin American companies, leading to multiple re-rating and supporting the performance of our holdings, particularly in Brazil (Eletrobras, Equatorial, MercadoLibre) and Mexico (Grupo Financiero Banorte).
Portfolio changes
Portfolio changes during the period were limited but targeted.
During the fourth quarter, we added two new positions: Horizon Robotics and Asia Vital Components.
Horizon Robotics is a leading Chinese designer of chips for electric and autonomous vehicles. It is becoming the preferred solution for automakers operating in China, who will increasingly face restrictions on accessing Nvidia chips—either due to US export bans or Chinese regulations mandating the use of domestic technology.
We also invested in Asia Vital Components, a Taiwanese company specialising in cooling solutions and electronic components used in computers and other electronic systems. Asia Vital is a key beneficiary of the rapid expansion of AI, which has significantly increased cooling requirements due to ever-higher computing performance.
At the end of December, the portfolio held 37 stocks, within our target range of 35 to 45 holdings. Throughout the quarter, we continued to take profits on the strongest performers in order to reinvest in undervalued companies with solid fundamentals.
Outlook for the coming months
2026 is shaping up to be a promising year for Emerging Markets, supported by the continued weakness of the US dollar and the sustained momentum of technological innovation in Asia. These trends are encouraging a growing number of IPOs in areas such as robotics, robotaxis and AI, further expanding the universe of leading technology companies.
China has firmly established itself as the undisputed global leader in robotics, installing more than 25,000 new industrial robots each month, representing over half of global deployments. The total number of robots operating in Chinese factories now exceeds two million, reinforcing the strength of its industrial base.
In parallel, Beijing has successfully engineered a period of détente with the United States by leveraging its near monopoly in rare earth elements, which are critical strategic resources. As a result, 2026 is expected to mark a period of easing trade relations, with a state visit by Donald Trump to Beijing scheduled for April—providing China with a window to narrow its technological gap with Nvidia in ultra-high-performance chips.
Meanwhile, certain markets such as India (14.0% of the Fund), Indonesia (2.0%) and Turkey (where we are not invested) delivered disappointing performance in 2025. This has created attractive investment opportunities, as valuations have once again become compelling.
1Reference indicator: MSCI EM NR USD. (Reinvested net dividends rebalanced quarterly. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor).
2Morningstar category: Global Emerging Markets Equity.
Carmignac Portfolio Emergents
Carmignac Portfolio Emergents F EUR Acc
- Recommended minimum investment horizon
- 5 years
- Risk indicator*
- 4/7
- SFDR - Fund Classification**
- Article 9
*Risk Scale from the KID (Key Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time. **The Sustainable Finance Disclosure Regulation (SFDR) 2019/2088 is a European regulation that requires asset managers to classify their funds as either 'Article 8' funds, which promote environmental and social characteristics, 'Article 9' funds, which make sustainable investments with measurable objectives, or 'Article 6' funds, which do not necessarily have a sustainability objective. For more information please refer to https://eur-lex.europa.eu/eli/reg/2019/2088/oj.
Main risks of the fund
Fees
- Entry costs
- We do not charge an entry fee.
- Exit costs
- We do not charge an exit fee for this product.
- Management fees and other administrative or operating costs
- 1.15% This estimate is based on actual costs over the past year.
- Performance fees
- 20.00% when the share class overperforms the Reference indicator during the performance period. It will be payable also in case the share class has overperformed the reference indicator but had a negative performance. Underperformance is clawed back for 5 years. 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
- 0.53% 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.
Performance
| Carmignac Portfolio Emergents | 1.7 | 19.8 | -18.2 | 25.5 | 44.9 | -10.3 | -14.3 | 9.8 | 5.5 | 23.6 |
| Reference Indicator | 14.5 | 20.6 | -10.3 | 20.6 | 8.5 | 4.9 | -14.9 | 6.1 | 14.7 | 17.8 |
| Carmignac Portfolio Emergents | + 12.7 % | + 1.9 % | + 7.1 % |
| Reference Indicator | + 12.7 % | + 5.0 % | + 7.6 % |
Source: Carmignac at 31 Dec 2025.
Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor).
Reference Indicator: MSCI EM NR index
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Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged.
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