Carmignac Portfolio Inflation Solution: Letter from the Fund Managers - Q2 2026

Author(s)

Frédéric LEROUX,Pierre-Edouard BONENFANT

Published on

July 8, 2026

Read time

2 minute(s) read

+3.28%

Performance of Carmignac Portfolio Inflation Solution¹ during the second quarter vs. +3.03% for its reference indicator².

+23.57%

Performance of Carmignac Portfolio Inflation Solution since launch³ vs. +6.35% for its reference indicator.

5.4%

Volatility of our strategy since launch.

During the second quarter of 2026, Carmignac Portfolio Inflation Solution returned +3.28%, compared with +3.03% for its reference indicator.

Market environment

The second quarter of 2026 was dominated by the disruption of the Strait of Hormuz following Israeli and US strikes against Iran. The immediate consequence was a surge in inflation, driven almost exclusively by higher energy prices. Combined with the partial disruption of certain supply chains, this resulted in weaker consumption and production, bringing the global economy close to a stagflationary environment.

However, the sharp decline in Chinese oil imports and the release of strategic reserves by most major economies prevented the sharp spike in energy prices that many analysts had feared. At the same time, non-energy commodities came under pressure as growth expectations weakened, while inflation expectations, which had initially rebounded, quickly retraced as the first signs of a peace agreement between the parties emerged.

The belief that this inflationary shock would not become endogenous allowed many equity indices, driven by the AI theme, to reach new highs despite a modest increase in bond yields. Strong nominal growth (inflation plus real growth) also supported robust corporate earnings growth over the period, as company revenues and profits continued to benefit from this favourable nominal environment.

How did we fare in this context?

Against this highly binary backdrop, where a resolution of the conflict could at any moment have triggered a sharp decline in oil prices, Carmignac Portfolio Inflation Solution generated positive performance during April and May, supported by rising inflation expectations, resilient equity markets, broadly supportive commodity prices and profitable relative value strategies. The fund gained 4.7% over the two-month period before declining 1.4% in June, as geopolitical tensions eased. During the first two months of the quarter, equities were the main driver of performance, while our exposure to emerging markets also provided valuable diversification relative to the US market.

Over the quarter as a whole, equities contributed 460 basis points to performance, inflation strategies were broadly flat, and commodities detracted 90 basis points, while interest rate strategies and currency positions (-12 basis points) made only a limited contribution to overall performance.

Outlook

The start of the quarter has been marked by the continued decline in oil prices and growing expectations that central banks will postpone further interest rate hikes. Markets appear to believe that the previous rise in oil prices will not generate meaningful second-round inflationary effects. Five-year US inflation expectations have indeed fallen back to 2.38%, returning to the levels seen before the attacks on Iran.

We take a different view. In our opinion, the easing of hostilities could provide renewed support to global growth at a time when several structural inflationary forces remain in place. Net immigration into the United States has slowed sharply, increasing the risk of wage inflation, while persistent shortages in semiconductors and memory continue to push up the prices of many finished and intermediate goods. In addition, the approaching US midterm elections could encourage a more expansionary fiscal stance. Against this backdrop, we believe inflation is likely to prove more persistent than currently anticipated, even if this remains a non-consensus scenario.

Beyond the current market volatility, which could lead to a meaningful correction in equity markets, we continue to expect equities to remain an important source of returns over the medium term, while anticipating a rotation towards more cyclical sectors.

We also believe that a broader contribution from the rest of the world to global growth should weaken the US dollar and support both emerging market assets and commodities. Finally, our exposure to future inflation is designed to benefit from any upside inflation surprise that challenges the prevailing disinflationary consensus. Carmignac Portfolio Inflation Solution was designed to diversify traditional asset allocations, with the objective of delivering value should inflation prove more persistent than markets currently expect.

¹I EUR Acc Share class.
²Eurostat Euro HICP excluding tobacco (interpolated using daily pricing).
³15/12/2023.

Carmignac Portfolio Inflation Solution I EUR Acc

ISIN: LU2715954413

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

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.

Risk of Capital Loss: The portfolio does not guarantee or protect the capital invested. Capital loss occurs when a unit is sold at a lower price than that paid at the time of purchase.

Currency: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments.

Interest Rate: Interest rate risk results in a decline in the net asset value in the event of changes in interest rates.

The Fund presents a risk of loss of capital. Please refer to the Fund’s prospectus to view the exhaustive list of risks.

Fees

ISIN: LU2715954413

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

ISIN: LU2715954413


Carmignac Portfolio Inflation Solution	+6,1	+12,9	+3,2	−0,1
Reference Indicator	+2,3	+2,1	+1,9	+0,0


Carmignac Portfolio Inflation Solution	+8,0%	+0,0%	+8,7%
Reference Indicator	+3,0%	+0,0%	+2,5%

Source: Carmignac at Jun 30, 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

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