Global Equities: Quality is the name of the game

Published on
16 July 2021
Read time
3 minute(s) read

The FP Carmignac Global Equity Compounders fund looks for quality companies across the globe – companies that today show the characteristics we believe are needed to successfully grow overtime. These typically demonstrate high sustainable profitability and strong environmental, social and governance (ESG) credentials, as testified by Maxime Carmignac – Managing Director Carmignac UK, and Mark Denham and Obe Ejikeme – the Fund Managers.

Do you feel the pandemic has changed investors’ mindset?

Maxime Carmignac: The pandemic has caused investors to reconsider the way they invest, shifting towards strategies that are geared to the long-term and mindful of the impact on the planet. People have recentred towards living essentials – family, healthcare and environmental issues – thinking more about the future and their legacy, not only for their loved ones but also for future generations and the planet. We have seen a shift in companies’ practices too: boosted by regulations and the growing demand from investors for sustainable solutions, they are acting on ESG issues, understanding the associated risks and opportunities.

How is this mindset reflected in the fund?

Mark Denham: The backbone of our process is to identify quality companies; companies that not only grow financially but do so in a sustainable way. Quality companies offer a high compounding effect and tend to be more robust during economic downturns. They are typically less leveraged and have stable margins, making them more cash generative and in turn, allowing them to reinvest for the future. But for us, the concept of quality is also linked to the ESG trail these companies leave behind.

In practice, how does it translate in your investment process?

Mark Denham: We start by mapping out the entire global equity universe, trying to identify the companies that score well on our profitability and reinvestment criteria. Then, we apply our socially responsible filters, consisting of both negative and positive screens. Once we have a sustainable investment universe, we refine it through in-depth fundamental research with the help of our sector analysts’ expertise. The result is a concentrated portfolio of ~40 high-conviction names.

Obe Ejikeme: In addition to our rigorous stock selection, we finetune the portfolio by adjusting its cyclicality based on the direction of the cycle. In other words, we look to optimise the portfolio to make sure we benefit from where we are in the business cycle. How? We adjust the sizing of our positions, increasing or decreasing our sensitivity depending on where we currently are on the cycle, but also on where we are heading next.

As ‘architect’ of this fund, could you tell us why investors should consider it?

Maxime Carmignac: I see myself more as its ‘mother’ than its ‘architect’! FP Carmignac Global Equity Compounders is a great ‘buy and hold’ product, with a socially responsible investment approach, suitable for investors seeking to achieve long-term capital growth while putting their capital to good use. The process is simple and straightforward, that investors can benefit serenely from the magic of the compounding effect – the 8th wonder of the world according to Albert Einstein. Mark and Obe are experienced professionals and form a complementary duo. Finally, the Fund is living up to its promises: since its launch over a year ago, it has delivered a performance of +33%, despite particularly complex and volatile markets1.

For further information you can access the Fund page and/or contact us.
(1) Versus +31.41% for the comparative benchmark, the MSCI World (USD), reinvested net dividends, converted daily, for unhedged share classes into the reference share class currency and into EUR for hedged share classes. Performance as of 15/06/2021. For the A GBP acc share class. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). The return may increase or decrease as a result of currency fluctuations.

FP Carmignac Global Equity Compounders A GBP ACC

ISIN: GB00BMGLBK75
Recommended minimum investment horizon
5 years
Risk indicator*
6/7
SFDR - Fund Classification
Article -

*Risk Scale from the KIID (Key Investor Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time.

Main risks of the fund

Equity: The Fund may be affected by stock price variations, the scale of which is dependent on external factors, stock trading volumes or market capitalization.Liquidity: Temporary market distortions may have an impact on the pricing conditions under which the Fund might be caused to liquidate, initiate or modify its positions.Discretionary Management: Anticipations of financial market changes made by the Management Company have a direct effect on the Fund's performance, which depends on the stocks selected.
The Fund presents a risk of loss of capital.

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PROMOTIONAL MATERIAL. This document may not be reproduced, in whole or in part, without prior authorisation from the Investment Manager. This document does not constitute a subscription offer, nor does it constitute investment advice. 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 Financial Conduct Authority (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, England, CM1 3BY; Registered in England and Wales with number 4162989. Carmignac Gestion Luxembourg SA, UK Branch (Registered Office: 2 Carlton House Terrace, London, SW1Y 5AF. Registered in England and Wales with number FC031103, CSSF agreement of 10/06/2013) has been appointed as the Investment Manager and distributor in respect of the Company. Access to the Company may be subject to restrictions with regard to certain persons or countries. The Company is not registered in North America, in South America, in Asia nor is it registered in Japan. The Company has not been registered under the US Securities Act of 1933. The Company may not be offered or sold, directly or indirectly, for the benefit or on behalf of a U.S. person, according to the definition of the US Regulation S and/or FATCA. The Company’s prospectus, KIIDs and annual reports are available at www.carmignac.com or upon request to the Investment Manager. The KIID must be made available to the subscriber prior to subscription. This material was prepared by Carmignac Gestion Luxembourg SA and is being distributed in the UK by the Investment Manager. Carmignac Gestion – 24 place Vendôme – F-75001 Paris. Tel: (+33) 01 42 86 53 35 – Investment management company approved by the AMF – Public limited company with share capital of € 15,000,000 – RCS Paris B 349 501 676. Carmignac Gestion Luxembourg – City Link – 7, rue de la Chapelle – L-1325 Luxembourg – Tel: (+352) 46 70 60 1 – Subsidiary of Carmignac Gestion – Investment fund management company approved by the CSSF – Public limited company with share capital of €23,000,000 – RC Luxembourg B 67 549.