Carmignac Portfolio Inflation Solution: Letter from the Fund Managers - Q1 2026
During the first quarter of 2026, Carmignac Portfolio Inflation Solution delivered a performance of +2.77%, compared with -0.73% for its reference indicator.
Market environment
The first quarter unfolded in two phases: a continuation of the disinflation trend that began in October 2022, followed in March by the outbreak of war in Iran and its impact on fossil energy prices. Market tensions, which could have been anticipated, remained very limited for two main reasons. First, corporate earnings momentum, particularly in the United States, remained very strong. Second, the economic slowdown that could result from reduced availability of fossil fuels and their derivatives would help prevent a sharp rise in interest rates, thereby supporting elevated valuations across financial and real estate assets.
Concerns about inflation driven by rising oil prices thus took a back seat, while the artificial intelligence theme regained momentum and redirected capital flows toward the United States. As a result, this exogenous inflationary shock led to a strengthening of the US dollar, outperformance of US equities, stable bond yields, and only marginally higher inflation expectations.
Moreover, market behaviour—highly binary and focused on day-to-day fluctuations in oil prices—did not facilitate the smooth implementation of a flexible management strategy.
How did we fare in this context?
Carmignac Portfolio Inflation Solution experienced a somewhat frustrating quarter, as this exogenous inflation did not trigger the rotation from US assets to the rest of the world that would typically be expected in a context of endogenous inflation.
In this environment, our equity (-36 bps) and fixed income (-4 bps) exposures detracted from performance, while our inflation hedging strategies (133 bps), commodity investments (220 bps), and currency management (81 bps) contributed positively to overall returns during the quarter.5
Nevertheless, the fund’s overall performance remained solid, particularly in light of its 5% one-year volatility. Adjustments to equity exposure, implemented to reflect a more uncertain environment, did not fully deliver: the underlying strength of the US market resulted in shallow corrections followed by rapid rebounds, primarily driven by technology stocks.
Outlook
The duration of the partial blockage of the Strait of Hormuz is likely to lead, through a sustained increase in fossil fuel and refined product prices, to more endogenous inflation, while fiscal policies increasingly appear to be geared toward supporting domestic growth. In this context, bond yields are expected to gradually rise, in tandem with inflation expectations. These gradual increases may not negatively impact equity markets, as higher interest rates would reflect stronger economic growth.
However, this progressive rise in rates and inflation is likely to result in a relative weakening of US markets, and therefore of the US dollar, which should support emerging markets and commodities, a combination that is particularly favourable for Carmignac Portfolio Inflation Solution.
It is therefore not unreasonable to envisage a market environment supportive of equities, inflation-linked assets, commodities, and rising interest rates—all themes to which our strategy can be simultaneously exposed.
1I EUR Acc share class.
2Eurostat Euro HICP ex tobacco index (interpolated into a daily quote).
315/12/2023.
431/03/2025-31/03/2026.
5Gross performance.
Carmignac Portfolio Inflation Solution
Carmignac Portfolio Inflation Solution I EUR Acc
- Recommended minimum investment horizon
- 5 years
- Risk indicator*
- 3/7
- SFDR - Fund Classification**
- Article 6
*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
- We do not charge an entry fee.
- Exit costs
- We do not charge an exit fee for this product.
- Management fees and other administrative or operating costs
- 1,11% of the value of your investment per year. This estimate is based on actual costs over the past year.
- Performance fees
- 20,00% when the share class overperforms the Reference indicator during the performance period. It will be payable also in case the share class has overperformed the reference indicator but had a negative performance. Underperformance is clawed back for 5 years. 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
- 0,50% 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 Portfolio Inflation Solution | +2,8 | +12,9 | +3,2 | −0,1 |
| Reference Indicator | −0,7 | +2,1 | +1,9 | +0,0 |
| Carmignac Portfolio Inflation Solution | +10,0% | - | +8,1% |
| Reference Indicator | +1,6% | - | +1,4% |
Source: Carmignac at Mar 31, 2026.
Date of 1st NAV : 15/12/2023.
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.
The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged.
Reference Indicator: Eurostat Euro HICP ex Tobacco index