Carmignac Patrimoine: Letter from the Fund Managers - Q3 2025

Carmignac Patrimoine A EUR Acc delivered a return of +3.72% in the third quarter of 2025, outperforming its reference indicator, which gained +3.02%. Year to date, the Fund has achieved a strong performance of +10.48%, significantly ahead of its indicator, which declined by -0.05%.

In the third quarter of 2025, risky assets adopted a glass-half-full perspective, focusing on encouraging signals despite a still-contrasting macroeconomic environment. First, US monetary policy turned more accommodative amid signs of a slight weakening in the labour market. The Federal Reserve (the Fed) delivered its first rate cut of the year in September, while leaving the door open to further adjustments before year-end. At the same time, uncertainty surrounding trade war eased somewhat following the signing of several deals between the United States, Europe, and Japan. Finally, President Donald Trump’s extensive budget package—the “One Big Beautiful Bill”—was passed by Congress. Among other measures, it extended the generous tax cuts introduced during his first term in office.
Markets therefore chose to overlook resilient inflation above central bank targets, widening public deficits, and ongoing geopolitical tensions.
Against this backdrop, US markets continued to be buoyed by the ongoing enthusiasm around artificial intelligence (AI). The momentum was sustained by significant investments from hyperscalers, robust corporate earnings, and a surge in deals and partnerships across the infrastructure and cloud computing sectors.

Emerging markets also outperformed, driven by strong performance in Asia. In contrast, European markets underperformed over the period, weighed down by a weaker-than-expected macroeconomic environment, the appreciation of the euro, tariffs, and heightened political uncertainty, notably in France.

On the fixed-income side, US yields declined over the quarter, reflecting the Fed’s aggressive easing cycle. In Europe, the ECB maintained its key rate at 2%, signaling a pause in its rate-cutting trajectory. In France, political instability stemming from disagreements over fiscal trajectory dominated headlines, pushing French sovereign yields higher—a move that reverberated across European bond markets.

Following sharp fluctuations earlier in the year, the euro depreciated slightly against the US dollar (-0.45%⁴) over the quarter.

Over the quarter, the Fund took full advantage of its equity and bond performance drivers, while the currency driver penalized performance, due to unfavourable absolute exposure to the yen and a relative overweight to the euro.

Equities: strong support from the technology and gold mining sectors
Performance in equities was driven by stock selection in the technology sector and exposure to gold miners. The Fund benefited from targeted diversification within the technology sector, covering the entire value chain, spread across several geographical zones and capitalisation segments.
Among the main positive contributors was Alphabet, which stood out thanks to its second-quarter 2025 results. Google's parent company was also buoyed by accelerated integration of artificial intelligence across its businesses, sustained growth in its cloud business, and benign outcome of the remedies in an antitrust case. Other US technology companies, such as Nvidia, Arista Networks and Amphenol, were also strong contributors, as was TSMC, the undisputed world leader in semiconductor manufacturing based in Taiwan.
The fund’s positions in Gold miners continued to benefit from the desire of investors and central banks to diversify their holdings away from the dollar in the face of a loss of credibility in US institutions.
However, certain positions weighed on performance, notably MercadoLibre, Novo Nordisk and Centene, which were the main sources of disappointment over the period.

Fixed Income: gains driven by our exposure to inflation and carry strategies
On the fixed income side, our inflation-linked strategies contributed to the fund's performance during the quarter, benefiting from more resilient inflation than expected in the eurozone and a more vigorous recovery in consumer price indices in the United States. In addition, our allocation to carry strategies continued to deliver a sustainable return, with a notable contribution from the corporate debt, subordinated financial debt and emerging debt segments. Finally, our cautious management of the modified duration enabled the fund to cope with divergent trajectories on the interest-rate markets.

The current economic environment is characterised by resilient global growth, underpinned by both accommodative monetary policies, notably from the Fed , and expansionary fiscal policies in several major economies (US, Germany, Japan).
In addition, the dynamism of investment in AI is a further driver of economic activity.
However, the main risk in this scenario lies in the resurgence of inflationary pressures, even though the inflation targets set by the central banks have not yet been fully met.

In this environment, our convictions are as follows:

• Equity selection remains the key driver of performance over the short, medium, and long term. Beyond a still-supportive environment for equities — marked by the reacceleration of US growth, ongoing fiscal stimulus, and central bank support — our stock selection favours AI-related companies with attractive valuations, industrial firms positioned on structural themes such as electrification and aeronautics, and financial companies benefiting from resilient fundamentals.
• Considering current valuations and the limited protective role of bonds, we are maintaining exposure to gold mining companies, protection strategies against widening credit spreads, and positions in the yen. We are also implementing optional and directional hedges on equity indices to manage potential downside risks.
• US interest rates are expected to resume their upward trend. The market continues to underestimate inflation pressures — driven by rising wages, higher tariffs, and weak global trade dynamics. This complacency is illustrated by the market expectations of an aggressive Fed easing cycle. In addition, with widening fiscal deficits and a more fragile debt structure, we expect a regime of sustainably higher rates. Accordingly, we maintain a negative modified duration and strong exposure to inflation-linked instruments, particularly in the United States.
• The US dollar is expected to continue weakening as institutional credibility erodes.