Carmignac Portfolio Emergents

• In July, emerging markets posted strong gains, driven primarily by China, Taiwan, and South Korea. In contrast, Brazil lagged behind due to profit-taking after a solid performance since the start of the year.• The IMF revised its 2025 growth forecast for emerging economies upward to 4.1% (from a previous 3.7%), supported by improved economic conditions in China and a partial easing of tariffs between the U.S. and China.
• On the trade front, the U.S. imposed 50% tariffs on imports from Brazil, while reaching new tariff agreements with several Asian countries: 30% with Vietnam, 25% with India, and 15% with South Korea.
• Chinese markets surged following the announcement of a large-scale infrastructure plan, including a hydroelectric dam in Tibet, signaling continued investment support. Additionally, the government introduced new digital platform regulations aimed at promoting healthier competition.
• South Korean markets extended their rally, buoyed by the election of a market-friendly president and continued attractive valuations.
• Indian markets, however, declined due to elevated valuations and lingering uncertainties regarding trade relations with the United States.

• The fund delivered a positive return in July, though it underperformed its benchmark index.• Our stock selection in Taiwan proved particularly successful, with Taiwan Semiconductor, Elite Material, and Lite-On delivering strong results, reaffirming our conviction in this key technology market.
• During the month, we experienced a classic rotation on the market with best performing countries and sectors posting poor performances. That was the case for our 4 top contributors to fund performance in the first 6 months of 2025 (Eletrobras, Hynix, Kotak, Mercadolibre) that are amongst the biggest detractors for July. This is owing to a profit taking after solid run and to a combination of macro/geopolitical headlines and a mixed earnings season.
• Despite an absolute positive performance of our Chinese holdings (VIPSHOP), we suffered versus our reference indicator. Our relative underperformance in China was due to our lack of exposure to large state-owned enterprises and index-heavyweights, which were among the top local performers during the period.
• Lastly, we suffered from the weakness of our Indian holdings that fell in line with the markets.

• We maintain a constructive outlook on EM Equities, which appear to benefit from heightened uncertainty in the United States. Indeed, Trump’s erratic policies may have an unintended positive impact on emerging markets, aided by a weaker U.S. dollar and still-attractive valuations.• Our recent trip to China confirmed two encouraging trends. Firstly, the government is increasingly prioritizing science and technology, with breakthroughs such as DeepSeek boosting confidence. Secondly, the Hong Kong financial markets are regaining appeal, driven by targeted reforms and IPOs of innovative companies.
• In this context, in China, we are identifying promising opportunities in themes such as: Artificial Intelligence, well-being and healthcare, Future mobility, Education and High-yield stocks (with strong shareholder returns)
• We continue to focus on high-quality, undervalued companies with shareholder-friendly policies, such as dividends and share buybacks.
• During the month, we made several portfolio adjustments. We closed our position in Argentine bank Galicia, and trimmed holdings in Elite Material, VIPShop, Eletrobras, and Banorte, all of which had posted significant gains year-to-date.
• In contrast, we increased our investment in DIDI, the Chinese mobility platform, and initiated a new position in CATL, the global leader in electric vehicle batteries, with exposure also to energy storage and autonomous vehicles.
• While we remain positive on Latin American exposure, we have partially reduced our allocation to lock in gains, following the region’s strong market appreciation since the beginning of the year.