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Carmignac Investissement Latitude: Letter from the Fund Manager - Q2 2026
During the second quarter of 2026, Carmignac Investissement Latitude delivered a return of +4.6%, underperforming its reference indicator, which gained +8.2%.
Market environment
The second quarter of 2026 was marked by the temporary closure of the Strait of Hormuz following Israeli and U.S. strikes against Iran. This triggered a spike in inflation, primarily driven by higher energy prices. Combined with disruptions to certain supply chains, these developments weighed on consumption and industrial production, temporarily bringing the global economy closer to a stagflationary scenario. However, the sharp decline in Chinese oil imports, together with the release of strategic petroleum reserves by most major economies, helped prevent a sustained surge in oil prices.
Following the start of U.S.-Iran negotiations and the partial reopening of the Strait of Hormuz, equity markets quickly recovered their losses and reached new record highs. Supported by a strong earnings season, investors continued to concentrate their buying on companies benefiting from the rapid expansion of artificial intelligence (AI). While the sector's leading companies continued to outperform, enthusiasm gradually broadened across the entire semiconductor value chain, resulting in significant performance dispersion and increasingly demanding valuations in certain segments. Emerging markets, particularly South Korea and Taiwan, were among the main beneficiaries of this trend thanks to their strong exposure to the AI ecosystem. Meanwhile, central banks maintained a cautious stance in light of persistent inflationary risks, which limited the upside for bond markets.
How did we fare in this context?
Against this backdrop, the Fund delivered a positive return over the quarter, although it underperformed its reference indicator.
Within the master fund, Carmignac Investissement, stock selection made a positive contribution to performance, with the technology sector acting as the main driver of value creation in both absolute and relative terms. SK Hynix and TSMC were the two largest contributors. Following SK Hynix's exceptional share price appreciation, we took profits on a significant portion of our position, adopting a more cautious stance given the memory chip leader's higher volatility profile. Stock selection within the industrial sector also supported performance, notably through Prysmian and Safran. Conversely, the healthcare and financial services sectors weighed on returns, despite strong contributions from selected holdings such as diagnostic imaging specialist Lantheus and digital payments company Block.
In this environment, characterised by a highly binary market, our equity hedging strategies weighed on quarterly performance. Having proved beneficial during the market correction in March, they were subsequently penalised by the sharp rebound in risk assets, supported by easing geopolitical tensions, the partial reopening of the Strait of Hormuz, and renewed optimism surrounding AI-related stocks. As a result, investor flows once again concentrated across the semiconductor value chain, providing strong support to global equity markets.
Outlook
Markets remain largely driven by momentum, with leadership still highly concentrated and signs of excess emerging across certain AI-related segments. In both the U.S. and Asia, equity market gains have been led primarily by the semiconductor value chain. What initially began as enthusiasm for the leading beneficiaries of AI has gradually broadened to include smaller, lower-quality companies, some of which have seen their share prices double or even triple within a matter of months. In several cases, valuations now appear to discount years of strong growth despite still limited visibility on underlying fundamentals. By contrast, many high-quality companies outside the technology sector remain overlooked by investors, even though their earnings outlook remains robust.
Over the coming months, we believe the market may enter a new phase of the AI cycle. Investors are increasingly questioning how the value created by AI will ultimately be distributed and whether semiconductor and equipment manufacturers will be able to sustain their pricing power over the long term. While these companies continue to benefit from supply chain bottlenecks today, the rising cost of AI infrastructure could gradually weigh on demand. At the same time, the market's focus is shifting towards model efficiency, driven by the emergence of open-source solutions, lower-cost models and more efficient use of computing capacity.
Within the master l fund Carmignac Investissement, we are seeking to build a more balanced portfolio. While maintaining meaningful exposure to the structural beneficiaries of AI—with a preference for the best-positioned companies across the semiconductor value chain—we are gradually increasing our allocation to high-quality businesses trading at attractive valuations. In particular, companies in the healthcare sector (McKesson, Cencora) and financial services (Tradeweb, Mastercard) should benefit from a potential broadening of the market rally and a rotation in market leadership beyond technology stocks alone.
We also believe that the end of hostilities could support global growth against a backdrop of persistent tightness in the U.S. labour market, sustained demand for AI infrastructure and ongoing supply constraints across parts of the semiconductor and memory markets. These factors could keep inflation more resilient than currently anticipated by the consensus and, consequently, lead to a more volatile market environment characterised by more frequent sector rotations. We therefore continue to manage the strategy's equity exposure actively to capitalise on these evolving market dynamics.
1A EUR Acc share class.
250% MSCI AC World NR index + 50% €STR Capitalized index.
3EUR Flexible Allocation - Global.
Carmignac Investissement Latitude
Carmignac Investissement Latitude A EUR Acc
- Recommended minimum investment horizon
- 5 years
- Risk indicator*
- 3/7
- SFDR - Fund Classification**
- Article 8
*Risk Scale from the KID (Key Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time. **Sustainable Finance Disclosure Regulation (SFDR) 2019/2088. The SFDR classification of the Funds may change over time.
Main risks of the fund
Fees
- Entry costs
- 4,00% of the amount you pay in when entering this investment. This is the most you will be charged. Carmignac Gestion doesn't charge any entry fee. The person selling you the product will inform you of the actual charge.
- Exit costs
- We do not charge an exit fee for this product.
- Management fees and other administrative or operating costs
- 1,80% of the value of your investment per year. This estimate is based on actual costs over the past year.
- Performance fees
- 20,00% max. of the outperformance once performance since the start of the year exceeds that of the reference indicator and if no past underperformance still needs to be offset. The actual amount will vary depending on how well your investment performs. The aggregated cost estimation above includes the average over the last 5 years, or since the product creation if it is less than 5 years.
- Transaction Cost
- 0,33% of the value of your investment per year. This is an estimate of the costs incurred when we buy and sell the investments underlying the product. The actual amount varies depending on the quantity we buy and sell.
Performance
| Carmignac Investissement Latitude | +2,6 | +16,9 | +10,2 | +13,2 | +2,1 | −6,2 | +27,0 | +9,1 | −16,1 | +0,3 |
| Reference Indicator | +7,7 | +5,1 | +14,2 | +10,5 | −6,6 | +12,9 | +1,8 | +28,9 | −4,8 | +8,9 |
| Carmignac Investissement Latitude | +12,7% | +6,1% | +5,7% |
| Reference Indicator | +10,4% | +7,0% | +8,7% |
Source: Carmignac at Jun 30, 2026.
Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). The Fund presents a risk of loss of capital.
Reference Indicator: 50% MSCI AC World NR index + 50% €STR Capitalized index
Marketing communication. Please refer to the KID/KIID, prospectus of the fund before making any final investment decisions. This document is intended for professional clients.
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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, for the shares which are not currency-hedged.
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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.