Thirty-seven years in emerging markets: Carmignac's pioneering expertise

Carmignac has been investing in emerging markets since 1989. Most of its competitors were not yet in existence. That heritage shapes everything about how we approach the asset class today.

Our first global Equities fund launched that year, offering more than 50% exposure to the asset class and making us one of the earliest European asset managers to take emerging markets seriously as an investment destination. Our first dedicated emerging market equity strategy followed in 1997.

In a complex, heterogeneous and volatile asset class, time spent in the markets leads to accumulated knowledge of how political cycles turn, how currencies behave under stress, how governance norms evolve and how local supply chains function. That knowledge cannot be acquired quickly and it cannot be replicated from a distance.

The emerging equities team at Carmignac sits within a broader investment infrastructure that amplifies its capabilities. At its core are Xavier Hovasse, head of emerging equities with 27 years of experience, and Naomi Waistell, who brought 18 years of specialist expertise when she joined in 2025, supported by dedicated regional analysts, covering the biggest markets.

Around that core sits a structure that extends the team's reach. Sector specialists cover technology, media & telecommunications, healthcare, consumer, industrials and finance. A dedicated sustainable investment function, a front office risk manager, a chief economist and a dedicated emerging market fixed income team all contribute to the investment process.

"Our key resource is our team. We spend 100% of our time looking at and analysing emerging markets," Waistell said. "On top of that, Carmignac has a pool of global industry analysts with a huge amount of expertise by industry. We also have a fixed income team, alongside macro economists who we can talk to about the bigger picture for our markets."

The investment philosophy is centred on companies with durable competitive advantages, strong balance sheets and genuine pricing power. Investment ideas are generated by the team, not by individuals — (and the investments decisions are taken collegially by the two co-fund managers that have ultimate decision making) – a structural choice that reduces key-person risk and broadens the quality of inputs into each decision.

Hovasse joined Carmignac in 2008 as a Latin America analyst, having spent nine years at BNP Paribas Asset Management managing emerging and global equities. He became fund manager in 2011 and holds the CFA charter.

His approach is built on the conviction that getting the macro framework right first helps with getting stock selection right. Economies running large deficits and dependent on foreign capital are avoided; surplus economies with orthodox monetary frameworks are preferred.

"The key variable in asset valuation is the cost of capital," he explains. "We have a very good understanding of the country risk, the currency risk and the balance of payments in every country where we deploy capital."

Having managed through the 2008 crisis, the commodity supercycle, emerging markets' prolonged underperformance of the 2010s and the 2025 revival, Hovasse brings a perspective on the asset class that only time and experience can build.

Waistell, meanwhile, spent a decade at Newton Investment Management before becoming a senior fund manager at Polar Capital specialising in global emerging markets. She holds the CFA charter and an MBA from the University of Cambridge.

She highlights the team's approach to sustainability: "We think that sustainability is actually value accretive and alpha seeking in its own right. We're just putting more information, more fundamental analysis into stock prices upfront."

Every stock in the FP Carmignac Emerging Markets portfolio must be aligned with a UN Sustainable Development Goal and the fund must maintain carbon intensity at least 50% below the MSCI EM index.

In September 2025, Waistell travelled to Taiwan and South Korea, meeting approximately 30 companies across the semiconductor supply chain.

The work deepened the team's understanding of where demand was accelerating, where supply constraints were creating pricing power, and which companies were best placed to benefit as AI infrastructure spending continued to expand.

Describing the research process, Waistell says: "We travel frequently, we visit emerging markets, we take the temperature of how a country is on the ground, we see the operations, we talk to the whole supply chain, the competitors, suppliers, whatever might give us incremental information. And we take that approach to triangulate the information as we form our investment thesis."

The objective is to test every investment thesis against every source of incremental insight available. That depth of knowledge feeds directly into how positions are sized.

The deliberate narrowness of the resulting portfolio — 35-45 holdings, active share of 80% as of end-March 2026 — is the product of knowing each holding deeply.

The environment that emerging markets are entering in 2026 plays directly to the strengths of a team built this way. The beta phase of the 2025 rally could give way to a more differentiated environment where earnings quality and company fundamentals drive outcomes.

In that environment, knowing companies deeply, having the macro framework to allocate capital to the right countries and having the discipline to act when investment cases change are the core of what makes the difference.

The next cycle in emerging markets may reward accumulated knowledge and disciplined process and Carmignac has been building that knowledge since before most of its competitors existed.

This article originally appeared on Trustnet.