Since the bond crisis of 2022, credit markets have emerged as the big winners in the fixed-income spectrum. Boosted by high carry and attractive valuations following the market shock, this asset class has won over new investors, delivering absolute returns often in the double-digit territory. Now is the time to take stock and look ahead to the future of this asset class.
Double digit returns achieved with low single digit standard deviation
Since 2020, our range of target maturity fixed income funds have delivered an outstanding performance, as demonstrated by the recent success of Carmignac Credit 2029, which delivered a +12.63% performance in its first year of existence, while maintaining a contained risk profile with an average portfolio risk of BBB.
Over a longer investment horizon, Carmignac Credit 2027 has generated a compelling performance of +22.04% since 30/06/2022, while the investment-grade credit index has returned only +10.07% over the same period. Our first fund, Carmignac Credit 2025 has also delivered better performance than its performance objective1 since inception.
Our target maturity fixed income funds have delivered a daily volatility that is 2 to 3 times lower than other bond segments (see graphic 1 below).
On the back of this success, our 3 target maturity fixed income funds have reached €2.9 billion in assets under management2. More than ever, we believe active management is crucial in order to take full advantage of credit markets to build attractive portfolios on a risk/return basis.
Graphic 1: One-year performance and volatility of our target maturity fixed income funds against market indices
Target maturity funds: pertinent performance engine for an allocation
We offer opportunistic investment vehicles that aim to seize opportunities across the credit spectrum. Nevertheless, our 3 target maturity funds are managed with very strict guidelines, with a pre-determined investment horizon, strong diversification (more than 250 lines in the portfolio at cruise speed), full currency hedging in euros, and a focus on quality issuers.
Our target maturity funds are also easy to use for portfolio construction. We have a wide investment universe (US credit, Euro credit, emerging credit, financial debt, structured credit) and highly diversified portfolios, enabling us to keep the funds open to subscriptions and redemptions on a daily liquidity basis throughout the life of the fund.
Thanks to their generous embedded yields and high average ratings, our target maturity strategies enable us to absorb adverse market scenarios that could present themselves to us in the future, both in terms of widening credit margins and rising interest rates (see graphic 2).
Graphic 2: 12 months performance scenario for Carmignac Credit 2029 depending of credit spreads and yield fluctuations
A simple and successful recipe unchanged for four years
Our credit team is composed of three fund managers who have demonstrated their ability to generate performance in a wide range of market conditions. They combine experience in traditional credit, structured credit, special situations and have been working together since 2015.
Their investment process and DNA of our target maturity strategies stem directly from our flagship fund, Carmignac Portfolio Credit, which has won numerous awards and received 5-star ratings from Morningstar and Quantalys. We have been awarded a platinum rating by Citywire for our expertise in corporate bonds3.
Our investment process is based on the selection of opportunities whose fundamental risk is overestimated by investors. We believe in active management and alpha generation and we try to optimize our performance by adding and pruning opportunities when we can improve the risk-return profile of the fund, always keeping in mind the target maturity. As demonstrated in graphic 3, this enables us to deliver returns that exceed the headline yields of our portfolios.
Finally, our funds benefit from robust portfolio construction, enabling them to achieve average investment grade ratings. We attach a great importance to environmental, social and governance criteria: our Carmignac Credit 2027 and Carmignac Credit 2029 funds are in line with Article 8 of the SFDR directive4.
Graphic 3: Contribution to Carmignac Credit 2029 performance since inception
Strong performance potential for the future
Credit markets are now richly valued thanks to the tightening of credit spreads we have seen since 2022, but dispersion is high and we see many pockets of value that we believe will deliver attractive risk-adjusted returns (see graphic 4).
We remain highly optimistic about sectors such as financials and energy, which are abundant in issuers with robust cash flows generation and solid fundamentals, but which suffer from investors' lower appetite and thus provide extra yield.
Our expertise in structured credit through investments in CLO tranches is also a high added value, since the tranches in which we invest have a very low accident rate, a short duration and a higher yield than traditional instruments.
Finally, the primary markets have been particularly buoyant in recent months, with new issuers that are not well known to the investor base raising capital. We are regularly finding very attractive opportunities in these issues, which should bolster our funds' returns in the future.
For the months ahead, we are confident in our ability to deliver high future performance while maintaining a prudent level of risk with highly diversified portfolios.
Graphic 4: Examples of opportunities benefiting from credit dispersion embedded in our target maturity fixed income funds
1Investment objective at the prospectus for A EUR shareclass: 1.90% annualized between the date of creation (30 october 2020) and 31 october 2025 (the “Maturity Date”).
2Assets under management in our target maturity fixed income Funds as of 21/10/2024.
3The reference to a ranking or prize, is no guarantee of the future results of the UCITS or the manager. Carmignac is rated Platinium in the “Bonds - Euro Corporates” category by Citywire for its sliding risk-adjusted performance, over the entire sector, over the period 31/01/2017 - 31/01/2024. Fund manager ratings and Citywire rankings are the property of Citywire Financial Publishers Ltd (“Citywire”) and © Citywire 2024. All rights reserved. Citywire information is the property and confidentiality of Citywire Financial Publishers Ltd (“Citywire”), may not be copied and Citywire excludes all liability arising from its use. Pierre Verlé and Alexandre Deneuville are “AA” rated by Citywire for their rolling three-year risk-adjusted performance across all funds the manager is managing to 30th September 2024. Citywire Fund Manager Ratings and Citywire Rankings are proprietary to Citywire Financial Publishers Ltd (“Citywire”) and © Citywire 2024. All rights reserved.
4SFDR (Sustainable Finance Disclosure Regulation) 2019/2088. For more information, visit: https://eur-lex.europa.eu/eli/reg/2019/2088/oj?locale=frlocale=en
Carmignac Credit 2027 A EUR Acc
- Recommended minimum investment horizon
- From the launch date to the maturity date, i.e. 30 June 2027.
- Risk indicator*
- 2/7
- SFDR - Fund Classification**
- Article 8
*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
Fees
- Entry costs
- 1,00 % 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
- 1,04 % of the value of your investment per year. This estimate is based on actual costs over the past year.
- Performance fees
- There is no performance fee for this product.
- Transaction Cost
- 0,06 % 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
| Carmignac Credit 2027 | +0,5 | +3,5 | +7,2 | +12,8 | +1,7 |
| Carmignac Credit 2027 | +0,8 % | +5,2 % | +5,6 % |
Source: Carmignac at Oct 30, 2026.
Date of 1st NAV : 02/05/2022.
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: -
Carmignac Credit 2029 A EUR Acc
- Recommended minimum investment horizon
- From the launch date to the maturity date, i.e. 28 February 2029.
- Risk indicator*
- 2/7
- SFDR - Fund Classification**
- Article 8
*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
Fees
- Entry costs
- 1,00 % 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
- 1,14 % of the value of your investment per year. This estimate is based on actual costs over the past year.
- Performance fees
- 20,00 % max. of the outperformance when the unit outperforms its annualised performance objective by 4.22% during the performance period. Any underperformance is recovered over 5 years. The actual amount will vary depending on how well your investment performs. The estimate of aggregated costs above includes the average for the last five years, or since the creation of the product if it is less than five years old. If the outperformance is constituted, the commission will be collected no earlier than December 2024.
- Transaction Cost
- 0,06 % 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
| Carmignac Credit 2029 | −0,3 | +5,0 | +8,0 | +5,3 |
| Carmignac Credit 2029 | +0,0 % | +5,6 % | +5,9 % |
Source: Carmignac at Oct 30, 2026.
Date of 1st NAV : 20/10/2023.
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: -