FP Carmignac European Leaders

Despite President Trump’s threat to impose 50% tariffs on European imports, which initially impacted the markets, the MSCI Europe Index rose by over 4.5%, marking a surprisingly strong performance.

The rally was supported by a temporary delay in the tariff implementation—now postponed until July 9—which helped ease investor concerns and fuelled a rebound in European equities.

This underperformance was primarily driven by the Healthcare sector that has been affected by Trump’s executive order aimed at reducing high prescription drug prices.

The Belgian biotech Argenx, was the largest detractor, after it missed revenue expectations and faced investor concerns over potential changes to Medicare reimbursement policies.

On the positive side, ASML was the top contributor to performance, benefiting from improved global market sentiment following progress in U.S.-China trade negotiations.

Prysmian, a multinational manufacturer of power and telecom cables, also performed strongly, particularly in May, after reporting robust Q1 2025 results. Its Transmission segment stood out, delivering over 50% organic growth.

Conversely, we fully exited our holding in Atlas Copco following a period of underperformance.

We also modestly trimmed our position in SAP, as its strong fundamentals appear to be increasingly reflected in its valuation.

Additionally, we reduced our exposure to healthcare stocks, which have underperformed year-to-date amid tariff concerns. In contrast, we increased our allocation to industrials, which we believe are well-positioned to benefit from ongoing consolidation trends across Europe.

The Fund continues to rely on bottom-up fundamental analysis with a medium-to-long-term horizon.

We remain committed to our philosophy and believe this is a great opportunity for our investors to gain access to some of Europe’s best companies at attractive entry valuations.