Carmignac Portfolio Grandchildren

• Markets have been climbing the wall of worry for most of the summer.• In August 2025, equity markets posted solid gains globally, with major indices such as the S&P 500 and Nasdaq reaching new record highs. These gains were primarily driven by a small group of mega-cap technology firms, including Nvidia, Microsoft, Apple, and Amazon.
• At Jackson Hole, following the release of July’s US non-farm payrolls—which suggested a slowing labour market—Powell opened the door to potential mid-September rate cuts. This fueled expectations of an aggressive cutting cycle.
• European markets underperformed in local currencies, with France lagging in particular due to political uncertainties.
• Chinese onshore equities rose to decade highs, supported by optimism around anti-involution reforms, strength in the technology sector, and incremental government measures aimed at boosting the equity market.
• The euro appreciated against the dollar over the period, creating a divergence between local currency and euro-denominated index performances.

• In August, the Fund delivered a negative performance in both absolute and relative terms.• The underperformance relative to our reference indicator was primarily driven by the Healthcare and Tech sectors.
• The technology sector faced pressure following earnings reports from several major firms that either missed expectations or included cautious forward guidance, contributing to the broader market sell-off.
• Microsoft, our largest holding, was among the impacted names. While the company exceeded Q2 earnings expectations, its weaker-than-anticipated revenue outlook for Q3 unsettled investors and weighed on sentiment.
• Vertex Pharmaceuticals was the top detractor in healthcare, falling over 14% due to a clinical trial failure. Despite strong fundamentals with 12% YoY revenue growth and $12B in cash, the setback overshadowed its earnings beat and weighed on sentiment.
• Conversely, Novo Nordisk emerged as the top contributor. After facing several headwinds in recent months, the stock rebounded strongly, delivering a 15% gain in August.
• At the sector level, Consumer Staples stood out as the strongest performer, demonstrating resilience amid broader market volatility.
• Unilever, a position we recently initiated, reported strong results. The operational separation of its ice cream business was completed in July, a strategic move viewed as a value unlock that enables greater focus on higher-margin segments.
• Prysmian which has been a contributor to the Fund for the past few months continued its strong momentum, capitalizing on robust demand in electrification and digital infrastructure.

• Our macroeconomic framework continues to advocate for a defensive approach to equity markets.• During the month, we made some adjustments to our portfolio. We initiated a position in Siemens which should benefit from Germany’s new infrastructure investment plan and the region’s industrial pivot.
• On the other side, we have reduced our position in Home depot and Prysmian crystallizing gains after their strong run in recent months and reducing risk to cyclical sentiment reversals.
• Political uncertainty in the US continues to inject volatility into markets while the euphoric rally in domestic European sectors appears overextended.
• In this environment, higher visibility should be rewarded. We therefore maintain our stance, limiting exposure to cyclical stocks in favour of quality.
• Healthcare illustrates this opportunity. Policy and tariff uncertainties have weighed on the sector, but greater clarity on regulation and trade policy could catalyse a significant re-rating.