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Carmignac Portfolio Grandchildren: Letter from the Fund Managers - Q2 2026

Author(s)
Mark DENHAM,Obe EJIKEME
Published on
14 July 2026
Read time
3 minute(s) read
+8.43%
Performance of the Fund in Q2 2026 (A EUR Share class).
+14.64%
Performance of its reference indicator1 in Q2 2026.
+9.45%
Annualized performance of the Fund since launch (31/05/2019) vs +14.16% for its reference indicator.

Carmignac Portfolio Grandchildren (A EUR Acc) delivered a performance of +8.43% in the second quarter of 2026, underperforming its reference indicator, which had a performance of +14.64%.

Market environment during the period

Developed equity markets recovered strongly in Q2 2026 after the volatility of the first quarter. Improved risk appetite was supported by easing Middle East tensions and lower oil prices. However, markets remain vulnerable to geopolitical developments, oil price fluctuations, and their implications for inflation, growth, and monetary policy.

AI leadership reasserted itself over the quarter. After the reassessment of AI-driven growth in Q1, investors returned to companies with direct exposure to the infrastructure build-out, particularly semiconductors, memory, electrical equipment and broader hardware beneficiaries. Ongoing hyperscaler capex commitments continued to support confidence in the structural AI investment cycle, although concerns emerged towards the end of the quarter regarding the sustainability of spending and the eventual return on these investments.

However, market breadth remained narrow. Strong index returns were driven by a relatively concentrated group of AI-related stocks, leaving positioning more crowded and valuations more demanding in parts of the market. This increased sensitivity to any disappointment in earnings delivery, capex trends or AI monetisation.

Overall, the quarter marked a clear improvement in sentiment, but the macro backdrop remained complex. Markets continued to balance resilient earnings against risks from inflation, policy rates, geopolitics and softer expected growth into H2 2026 and 2027. The environment reinforced the need for selectivity, with a focus on durable earnings growth rather than broad momentum exposure.

How did we fare in this context?

During the second quarter of 2026, the Fund rebounded strongly on absolute terms but underperformed its reference indicator in what has been a particularly challenging and fragmented market environment.

During the quarter, the portfolio benefited from strong stock selection in Communication Services and Consumer names, with holdings such as Alphabet, InterContinental Hotels, Colgate and Home Depot contributing positively to relative performance. The portfolio’s structural underweight to Energy also proved beneficial as oil prices retraced following the easing of Middle Eastern tensions.

Industrials, the portfolio’s largest sector allocation also made a meaningful positive relative contribution over the quarter. This was led by strong performance from Prysmian and Schneider Electric, while the newly initiated position in Parker Hannifin also contributed positively. Alongside gains from ASML, Broadcom, Nvidia and Arista Networks, this reflected the portfolio’s continued exposure to long-term structural growth themes, including AI infrastructure, electrification, automation and digitalisation.

Despite these positive contributors, the portfolio lagged the benchmark in a market where returns became increasingly concentrated in a narrow group of AI beneficiaries. The main headwind was the portfolio’s lower exposure to semiconductors and AI infrastructure companies, which significantly outperformed as investor enthusiasm for AI-related capital expenditure accelerated. Financials and Health Care also weighed on relative performance, as investors favoured companies with more direct exposure to AI infrastructure spending and rotated away from defensive compounders, despite still resilient underlying fundamentals.

Outlook & positioning

Portfolio activity during the quarter remained disciplined and valuation driven. We selectively reduced exposure to some of the strongest-performing AI beneficiaries, including Amazon and Nvidia, where share price appreciation had led to more demanding valuations and higher portfolio concentration. Capital was redeployed into high-quality businesses where long-term fundamentals remained strong, but market expectations appeared more subdued.

Healthcare was a key area of reinvestment, with additions to AstraZeneca and EssilorLuxottica reflecting our preference for companies with durable demand, innovation-led growth and strong earnings visibility. We also added to quality compounders such as Relx, Equifax and Church & Dwight, taking advantage of temporary weakness where we saw attractive long-term return potential.

Overall, the quarter reinforced the importance of maintaining a disciplined investment approach. While benchmark returns were driven by an increasingly concentrated group of AI-related companies, the portfolio remains focused on high-quality businesses capable of delivering sustainable earnings growth across a range of market environments. As a result, the portfolio enters Q3 with a more balanced mix of AI exposure, healthcare and other quality compounders.

Importantly, the fundamentals of our holdings remain strong. The portfolio continues to exhibit resilient earnings growth, high returns on capital and robust cash flow generation, with limited balance sheet risk. The recent correction has also provided an opportunity to reinforce our highest-conviction positions at more attractive valuations.

In this context, we do not view the current environment as a structural challenge, but rather as a temporary phase where market dynamics have overshadowed fundamentals. As conditions normalise and investor focus returns to earnings quality and visibility, we expect the portfolio’s strong fundamentals and disciplined positioning to translate into improved performance.

1Reference indicator: MSCI WORLD (USD, net dividends reinvested). Past performance is no guarantee of future results. They are net of fees (excluding any entry fees applied by the distributor).
Source: Carmignac, Bloomberg, data as of 30/06/2026. Performance of the A EUR Acc share class ISIN code: LU1966631001. Risk Scale from the KID (Key Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time. Past performance is not necessarily indicative of future performance. The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged. Performances are net of fees (excluding possible entrance fees charged by the distributor).

Carmignac Portfolio Grandchildren

An intergenerational Fund focused on quality, sustainable companies
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Carmignac Portfolio Grandchildren A EUR Acc

ISIN: LU1966631001
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. **Sustainable Finance Disclosure Regulation (SFDR) 2019/2088. The SFDR classification of the Funds may change over time.

Main risks of the fund

Equity: The Fund may be affected by stock price variations, the scale of which is dependent on external factors, stock trading volumes or market capitalization.
Currency: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments.
Discretionary Management: Anticipations of financial market changes made by the Management Company have a direct effect on the Fund's performance, which depends on the stocks selected.
The Fund presents a risk of loss of capital. Please refer to the Fund’s prospectus to view the exhaustive list of risks.

Fees

ISIN: LU1966631001
Entry costs
4.00% of the amount you pay in when entering this investment. This is the most you will be charged. Carmignac Gestion doesn't charge any entry fee. The person selling you the product will inform you of the actual charge.
Exit costs
We do not charge an exit fee for this product.
Management fees and other administrative or operating costs
1.71% of the value of your investment per year. 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
0.30% of the value of your investment per year. 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

ISIN: LU1966631001
Carmignac Portfolio Grandchildren−1.4−5.1+21.9+23.0−24.2+28.4+20.3+15.5
Reference Indicator+12.7+6.8+26.6+19.6−12.8+31.1+6.3+15.5
Carmignac Portfolio Grandchildren+5.2%+3.6%+9.4%
Reference Indicator+17.4%+12.3%+14.2%

Source: Carmignac at 30 Jun 2026.
Date of 1st NAV : 31/05/2019.
Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). The Fund presents a risk of loss of capital.
The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged.

Reference Indicator: MSCI World NR index

Share

Marketing communication. Please refer to the KID/KIID, prospectus of the fund before making any final investment decisions. This document is intended for professional clients.

This material may not be reproduced, in whole or in part, without prior authorisation from the Management Company. This material does not constitute a subscription offer, nor does it constitute investment advice. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. This material has been provided to you for informational purposes only and may not be relied upon by you in evaluating the merits of investing in any securities or interests referred to herein or for any other purposes. The information contained in this material may be partial information and may be modified without prior notice. They are expressed as of the date of writing and are derived from proprietary and non-proprietary sources deemed by Carmignac to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Carmignac, its officers, employees or agents.

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.

Reference to certain securities and financial instruments is for illustrative purposes to highlight stocks that are or have been included in the portfolios of funds in the Carmignac range. This is not intended to promote direct investment in those instruments, nor does it constitute investment advice. The Management Company is not subject to prohibition on trading in these instruments prior to issuing any communication. The portfolios of Carmignac funds may change without previous notice. The reference to a ranking or prize, is no guarantee of the future results of the UCIS or the manager.

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The Funds’ prospectus, KIDs, NAVs and annual reports are available at www.carmignac.com/en, or upon request to the Management Carmignac Portfolio refers to the sub-funds of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive. The French investment funds (fonds communs de placement or FCP) are common funds in contractual form conforming to the UCITS or AIFM Directive under French law.

  • In the United Kingdom: the Funds’ respective prospectuses, KIIDs and annual reports are available at www.carmignac.com/en-gb, or upon request to the Management Company, or for the French Funds, at the offices of the acilities Agent, Carmignac UK Ltd, 2 Carlton House Terrace, London, SW1Y 5AF. This document was prepared by Carmignac Gestion, Carmignac Gestion Luxembourg or Carmignac UK Ltd. FP Carmignac ICVC (the “Company”) is an Investment Company with variable capital incorporated in England and Wales under registered number 839620 and is authorised by the FCA with effect from 4 April 2019 and launched on 15 May 2019. FundRock Partners Limited is the Authorised Corporate Director (the “ACD”) of the Company and is authorised and regulated by the FCA. Registered Office: Hamilton Centre, Rodney Way, Chelmsford, Essex, CM1 3BY, UK; Registered in England and Wales with number 4162989. Carmignac Gestion Luxembourg SA has been appointed as the Investment Manager and distributor in respect of the Company. Carmignac UK Ltd (Registered in England and Wales with number 14162894) has been appointed as a sub-Investment Manager of the Company and is authorised and regulated by the Financial Conduct Authority with FRN:984288.

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  • In Belgium: This document is intended for professional clients. This content has not been validated by FSMA. The decision to invest in the promoted fund should take into account all its characteristics or objectives as described in its prospectus. This communication is published by Carmignac Gestion S.A., a portfolio management company approved by the Autorité des Marchés Financiers (AMF) in France, and its Luxembourg subsidiary Carmignac Gestion Luxembourg, S.A., an investment fund management company approved by the Commission de Surveillance du Secteur Financier (CSSF). “Carmignac” is a registered trademark. “Investing in your Interest” is a slogan associated with the Carmignac trademark. This document does not constitute advice on any investment or arbitrage of transferable securities or any other asset management or investment product or service. The information and opinions contained in this document do not take into account investors’ specific individual circumstances and must never be interpreted as legal, tax or investment advice. The information contained in this document may be partial and could be changed without notice. This document may not be reproduced in whole or in part without prior authorisation. The risks and fees are described in the KID (Key Information Document). The prospectus, KID, the net asset-values and the latest (semi-) annual management report may be obtained, free of charge, in French or in Dutch, from the management company (tel. +352 46 70 60 1) or by consulting its website or www.fundinfo.com. These materials may also be obtained from Caceis Belgium S.A., the financial service provider in Belgium, at the following address: avenue du port, 86c b320, B-1000 Brussels. The Fund (fonds commun de placement or FCP) is a common fund in contractual form conforming to the UCITS Directive under French law. Access to the Fund may be subject to restrictions regarding certain persons or countries. The Funds are not registered for retail distribution in Asia, in Japan, in North America, nor are they registered in South America. Carmignac Funds are registered in Singapore as restricted foreign scheme (for professional clients only). The Funds have not been registered under the US Securities Act of 1933. The Funds may not be offered or sold, directly or indirectly, for the benefit or on behalf of a «U.S. person», according to the definition of the US Regulation S and FATCA. In case of subscription to a fund subject to Article 19bis of the Belgian Income Tax Code (CIR92), the investor will have to pay, upon redemption of his or her shares, a withholding tax of 30% on the income (in the form of interest, or capital gains or losses) derived from the return on assets invested in debt claims. Distributions are subject to withholding tax of 30% without income distinction. In case of subscription in a French investment fund (fonds commun de placement or FCP), you must declare on tax form, each year, the share of the dividends (and interest, if applicable) received by the Fund. Any complaint may be referred to complaints@carmignac.com or CARMIGNAC GESTION - Compliance and Internal Controls - 24 place Vendôme Paris France or on the website www.ombudsfin.be.

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For Carmignac Portfolio Long-Short European Equities: Carmignac Gestion Luxembourg SA in its capacity as the Management Company for Carmignac Portfolio, has delegated the investment management of this Sub-Fund to White Creek Capital LLP (Registered in England and Wales with number OCC447169) from 2nd May 2024. White Creek Capital LLP is authorised and regulated by the Financial Conduct Authority with FRN : 998349.

Carmignac Private Evergreen refers to the Private Evergreen sub-fund of the SICAV Carmignac S.A. SICAV – PART II UCI, registered with the Luxembourg RCS under number B285278.