Carmignac Portfolio Patrimoine Europe

• The US economy remains resilient, with growth expanding by 0.7% qoq in the second quarter—slightly above expectations. US CPI inflation also increased in June, with the core rate moving closer to 3% year-on-year.• In contrast, eurozone growth was more moderate, rising by 0.1% quarter-on-quarter in the second quarter. Headline inflation in the eurozone edged up to the target of 2% year-on-year in June.
• The Fed has kept rates on hold—despite continued pressure from Trump—while the ECB has also opted to pause.
• The announcement of new US trade agreements with major partners including Japan and the EU, as well as the passage of the One Big Beautiful Bill Act, provided increased policy clarity.
• Risk assets responded positively. US stocks outperformed once again, with significant gains among leading AI-related companies.
• US Treasury yields rose in July, reflecting both a more optimistic growth outlook and increased market concerns about the fiscal situation.
• Eurozone government bond yields also drifted higher due to generally positive growth sentiment.
• The US dollar strengthened in July—its first monthly gain of 2025—driven by robust US economic data, consistent Fed messaging, and a reversal in previously bearish market positions.

• In a less favourable environment for European assets, the fund posted a negative performance, underperforming its reference index.• The main source of underperformance during the month was equity selection.
• European growth and quality stocks continued to lag behind value stocks, particularly in the financial and energy sectors, with examples including Hermès (-6%) and ASML (-9%).
• The key underperformer was Novo Nordisk (-28%), which suffered from the appointment of a new CEO and a profit warning, with downgraded revenue and earnings guidance due to a slowdown in US sales of its flagship obesity treatments.
• Our decision to reduce exposure to quality stocks to around 20% helped partially offset this negative contribution but was not sufficient to fully neutralize it.
• On the fixed income side, the fund benefited from strong credit performance and low sensitivity to sovereign rates.

• We remain optimistic regarding global growth prospects, both in the US and Europe. Recent agreements provide greater visibility and stability for international trade.• We favour equity exposure to benefit from this more supportive environment, while maintaining a cautious approach on rates, given potential risks stemming from fiscal slippage.
• Despite the recent reduction in our exposure to growth and quality stocks, we maintain an allocation of around 20% to this segment.
• We believe that the recent underperformance of quality stocks, particularly in healthcare, has been excessive. The sharp rotation into value names has brought relative valuations back to historically attractive levels.
• As such, we are willing to maintain – and potentially increase – our exposure to these resilient, well-capitalised companies, which are likely to rebound and outperform once market sentiment stabilises and fundamentals reassert their influence.
• Additionally, our diversification strategies across commodities and currencies contribute to enhanced risk management within the portfolio.