Our macroeconomic outlook
Global growth remains unchanged at 3%, still supported by AI investment, national security spending and fiscal largesse.
Raphaël GALLARDO
Chief Economist
Europe
FISCAL ACTIVISM TO SUPPORT THE “SLEEPING BEAUTY”.
- The European cyclical recovery should materialise, supported by the German plan, Next Generation EU in Italy and the continuation of a virtuous cycle in Spain.
- The ECB is expected to favour a wait-and-see approach, as disinflation loses momentum amid a resilient labour market.
USA
BROAD-BASED STIMULUS: GROWTH TODAY, INFLATION TOMORROW?
- US growth shows no sign of slowing. Still driven by AI investment, the economy is running hot amid an accommodative Fed and Donald Trump’s fiscal activism. As the midterm elections approach, additional measures could further extend the run.
- Inflation is likely to remain durably above target due to a shrinking labour force and higher tariffs, but AI-driven productivity gains help mitigate the risk of second-round effects.
China
THE 15th FIVE-YEAR PLAN REASSERTS THE PRIORITY OF A WAR ECONOMY.
- China’s new Five-Year Plan prioritises technological self-sufficiency and the rollout of industrial AI. However, it includes no decisive measures to address the renewed downturn in the property sector or rising youth unemployment.
- In a persistently more protectionist environment, Beijing is expected to widen its fiscal deficit to sustain growth above 4%.
In focus
AI AS A STRATEGIC BATTLEGROUND SHAPING THE GLOBAL ECONOMY
Maxime CARMIGNAC
Chief Executive Officer of Carmignac UK Ltd.
AI AT CARMIGNAC: ACTIVE INVESTING.
- Our study on active management has shown that equity funds with strong convictions (active share1 > 80%) and operating within an open-architecture framework outperform their reference indicator, net of fees, by an average of 0.50% to 0.70% per year2, depending on the region.
- Having become a major geopolitical and industrial issue, AI requires a deep understanding of its use cases, value chain and risks. To address this, we have made targeted investments and built a dedicated team to identify value creation opportunities.
Frédéric LEROUX
Head of Cross Asset, Fund manager
IS THERE A BUBBLE IN ARTIFICIAL INTELLIGENCE?
- Since the beginning of the Industrial Revolution, bubbles have enabled the large-scale diffusion of major technological innovations throughout the economy.
- Investor euphoria, combined with the inability of companies in sectors disrupted by innovation to forego the massive investments required, facilitates this diffusion. The resulting process of creative destruction, as theorised by Schumpeter, can unfold over many years.
Our experts
Naomi WAISTELL
Fund Manager
EMERGING MARKETS: FROM IMITATORS TO INNOVATORS
- From memory and semiconductors to robotics and AI applications, EM companies lead key parts of the innovation cycle, with highest AI adoption rates. Physical AI is already embedded into the real economy, driving productivity gains and margin expansion.
- After years of underallocation, valuations remain attractive compared to developed markets, offering a credible alternative and diversification. The next EM cycle is about innovation, earnings and valuation discipline.
- Our EM strategies are well positioned to benefit from this structural shift, with selective positioning on key enablers across the AI value chain in Asia, coupled with exposure to domestic growth stories across India, SE Asia and Latin America.
Kristofer BARRETT
Head of Global Equities, Fund Manager
AI: THE DISRUPTED VS THE DISRUPTERS
- Token generation, a proxy for compute demand, continues to double roughly every two months.
- After the 2024 pre-training phase, AI in 2025 has absorbed most available human data, driving higher usage and sharply increasing compute needs. As data centres take years to build, supply cannot keep pace, creating capacity constraints and higher prices.
- We are refining our AI exposure by reducing companies facing excessive free cash flow pressure from aggressive investment plans, while favouring hardware names benefiting from the capex cycle.
- We are also building contrarian exposure to software, where AI is likely to be layered gradually onto existing systems rather than deployed disruptively.
Our asset allocation convictions for 2026
EQUITY MARKETS: BETWEEN CONFIRMED LEADERSHIP AND OVERLOOKED POCKETS OF VALUE.
Jacques HIRSCH
Fund Manager
- Nominal growth and fiscal expansion should continue to support equity markets, arguing in favour of active diversification:
- towards themes that remain well supported (technology, emerging markets, European cyclicals),
- and towards segments that have lagged, such as those perceived as “losers” of the AI wave, consumer sectors and healthcare.
- In an ongoing tense geopolitical environment, commodities appear attractive, with a preference for gold and copper.
- Bull markets often end with a phase of heightened volatility. It is therefore essential to prepare for this now, both in portfolio construction and in security selection.
THE US BOND MARKET DOES NOT REFLECT THE STRENGTH OF THE ECONOMY.
Guillaume RIGEADE
Co-Head of Fixed Income, Fund manager
- While European and Japanese rate markets have already registered the impact of lavish fiscal policy, US rates continue to hover at low levels. Resilient growth and inflation should strongly narrow this rate gap between regions.
- Our flexible management will enable us to benefit from the high carry on euro rates and the rising rate across the Atlantic.
- Furthermore, our broad investment universe will allow us to seize opportunities in the segments of emerging debt or inflation strategies which present attractive valuations.
REINFORCED SELECTIVITY ON THE CREDIT SIDE.
Pierre VERLÉ
Head of Credit, Co-Head of Fixed Income, Fund Manager
- After 3 years of tightening of credit spreads, 2026 should be marked by greater polarisation across both the Investment Grade and High Yield spectrum.
- Less favorable technical factors and increasing credit events will favour active management like ours.
- Generous embedded yields and high dispersion within the credit spectrum should allow us to deliver attractive risk-adjusted returns.
1 Active share measures the degree of difference between the securities held in a portfolio and those of its benchmark.
2 Based on a rolling five-year performance over a total ten-year period.
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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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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.