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I. Off the beaten path approach of Carmignac Investissement

Part 1: seeking the unseen in small and mid caps

Published on
October 23, 2025
Read time
3 minute(s) read

In Carmignac Investissement, our philosophy is simple: to seek profitable growth at the right price.
While some of the fund’s holdings sit within the world’s most established growth stories, we also deliberately venture off the beaten path — identifying lesser-known companies that offer diversification, sustained quality and attractive valuations.

Carmignac Investissement embraces this road less travelled through three complementary approaches: dissecting structurally growing value chains, uncovering underappreciated opportunities in emerging markets, and investing in high-quality small and mid-cap companies (SMIDs).

This first article in a three-part series focuses on the latter— the SMID universe, which currently accounts for 9% of the portfolio1 — where innovation, niche leadership, and attractive valuations often combine to create powerful long-term opportunities. According to Kristofer Barrett, Fund Manager of Carmignac Investissement, this focus on high-quality SMIDs is a defining feature of the fund’s investment strategy.

The niche opportunities

By focusing on SMIDs, we unlock access to:

  • Idiosyncratic local growth stories through regional leaders with niche expertise.
    Example: Jumbo (Greece)2, a specialty retailer with a robust net cash position and strong free cash flow. The company dominates within its sector (toys, household, and seasonal products) across Greece and neighbouring markets. With an attractive valuation (6.8x one-year forward P/E) and expected earnings growth of 7% per year in 2025 and 2026, Jumbo exemplifies the kind of overlooked stocks we seek.
  • Full value chain exposure: Once a value chain has been identified, SMIDs offer the opportunity to capture its full potential at every stage — by investing in innovative suppliers that often hold oligopolistic positions and are typically absent from major indices.
    Example: Elite Material (Taiwan), a leading producer of copper clad laminates, essential to high-end printed circuit boards used in Artificial Intelligence (AI) servers. With margins near 30% and ROIC averaging 18%, Elite Material stands out as a structural beneficiary of the AI value chain2.

Selectivity matters even more

Selectivity is key when investing in SMIDs. We seek companies that stand apart from large-scale competitors, delivering profitable growth, robust balance sheets (often with net cash), and attractive valuations.

From a valuation perspective, the free cash flow yield (FCF yield) is a key metric. For our SMID positions, it typically ranges between 5% and 10%, a level that is on average higher than that of large-cap companies. Value does not come without growth. Although growth profiles vary, the two go hand in hand. Some of our SMID holdings exposed to AI deliver double-digit growth, while others, such as IMCD—a distributor in high-value specialty chemicals in sectors like pharmaceuticals, personal care, and functional foods—offer lower but steady growth.

We invest across the US, Europe, and Emerging Markets, in companies with €500 million to €10 billion in market capitalization. Each market correction (like DeepSeek or Liberation Day) opens the door to increasing our SMID exposure. We initiate our positions very slowly and build them very gradually over time. Liquidity is closely monitored through average daily trading volume and maintained by keeping individual positions small, averaging around 0.35% of the Fund.

Spotlight on Taiwan – a hidden goldmine of smid

Few markets illustrate the opportunities within SMID universe better than Taiwan.
Beyond its tech giants, the island is home to a dynamic ecosystem of SMID innovators — often family or founder-led, highly profitable, and with governance standards that rival developed markets. Many of these companies offer attractive dividends and dominant positions in their sub-sectors.

Notable examples include:

  • Gudeng Precision – a world-class provider of semiconductor handling and storage solutions, benefiting from the China–US supply chain decoupling.
  • Poya International - Taiwan’s largest specialty retail chain (cosmetics, fashion accessories, and more), distinguished by strong local branding, robust cash flows, and an attractive dividend profile.

Putting ‘off the beaten track’ into action

While our top 10 holdings feature some of the world’s most compelling growth stories, more than half of our portfolio consists of stocks barely covered — or not covered at all — by the MSCI World Index (~2,500 constituents). 18 out of our 25 SMID holdings are entirely absent from the index1.

In terms of performance, SMID has contributed to 8% of the fund’s 2025 performance as of end of September (with an average exposure of 5.5% in 2025)1.

By identifying SMID companies with durable competitive advantages, strong balance sheets, and attractive valuations, we aim to build a portfolio that remains agile, diversified, and resilient to market concentration. In a world of crowded trades, what remains unseen may well be the most valuable.

Source: Carmignac, 30/09/2025.

1Source: Carmignac, 30/09/2025.
2Source: Carmignac, Bloomberg, 30/09/2025. Reference to certain securities and financial instruments is for illustrative purposes. This is not intended to promote direct investment in those instruments, nor does it constitute investment advice. Portfolio allocations may change at any time without notice.

II. Off the beaten path approach of Carmignac Investissement

Part 2: unlocking the full potential of value chains
Read the article

Carmignac Investissement A EUR Acc

ISIN: FR0010148981
Recommended minimum investment horizon
5 years
Risk indicator*
4/7
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

Equity: The Fund may be affected by stock price variations, the scale of which is dependent on external factors, stock trading volumes or market capitalization.
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.
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.
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: FR0010148981
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
0,35% 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: FR0010148981
Carmignac Investissement+11,0+25,0+18,9−18,3+4,0+33,7+24,7−14,2+4,8+2,1
Reference Indicator+4,4+25,3+18,1−13,0+27,5+6,7+28,9−4,8+8,9+11,1
Carmignac Investissement+19,1%+10,1%+8,5%
Reference Indicator+15,9%+13,5%+11,3%

Source: Carmignac at Sep 30, 2025.
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: MSCI AC World NR index

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Marketing communication. Please refer to the KID/KIID, prospectus of the fund before making any final investment decisions.

This material may not be reproduced, in whole or in part, without prior authorisation from the Management Company. This material does not constitute a subscription offer, nor does it constitute investment advice. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. This material has been provided to you for informational purposes only and may not be relied upon by you in evaluating the merits of investing in any securities or interests referred to herein or for any other purposes. The information contained in this material may be partial information and may be modified without prior notice. They are expressed as of the date of writing and are derived from proprietary and non-proprietary sources deemed by Carmignac to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Carmignac, its officers, employees or agents.

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.

Reference to certain securities and financial instruments is for illustrative purposes to highlight stocks that are or have been included in the portfolios of funds in the Carmignac range. This is not intended to promote direct investment in those instruments, nor does it constitute investment advice. The Management Company is not subject to prohibition on trading in these instruments prior to issuing any communication. The portfolios of Carmignac funds may change without previous notice. The reference to a ranking or prize, is no guarantee of the future results of the UCIS or the manager.

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The risks, fees and ongoing charges are described in the KID (Key Information Document). The KID must be made available to the subscriber prior to subscription. The subscriber must read the KID. Investors may lose some or all their capital, as the capital in the funds are not guaranteed. The Funds present a risk of loss of capital.

The Funds’ prospectus, KIDs, NAVs and annual reports are available at www.carmignac.com/en, or upon request to the Management Carmignac Portfolio refers to the sub-funds of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive. The French investment funds (fonds communs de placement or FCP) are common funds in contractual form conforming to the UCITS or AIFM Directive under French law.

  • In the United Kingdom: the Funds’ respective prospectuses, KIIDs and annual reports are available at www.carmignac.com/en-gb, or upon request to the Management Company, or for the French Funds, at the offices of the acilities Agent, Carmignac UK Ltd, 2 Carlton House Terrace, London, SW1Y 5AF. This document was prepared by Carmignac Gestion, Carmignac Gestion Luxembourg or Carmignac UK Ltd. FP Carmignac ICVC (the “Company”) is an Investment Company with variable capital incorporated in England and Wales under registered number 839620 and is authorised by the FCA with effect from 4 April 2019 and launched on 15 May 2019. FundRock Partners Limited is the Authorised Corporate Director (the “ACD”) of the Company and is authorised and regulated by the FCA. Registered Office: Hamilton Centre, Rodney Way, Chelmsford, Essex, CM1 3BY, UK; Registered in England and Wales with number 4162989. Carmignac Gestion Luxembourg SA has been appointed as the Investment Manager and distributor in respect of the Company. Carmignac UK Ltd (Registered in England and Wales with number 14162894) has been appointed as a sub-Investment Manager of the Company and is authorised and regulated by the Financial Conduct Authority with FRN:984288.

  • In Switzerland: the prospectus, KIDs and annual report are available at www.carmignac.com/en-ch, or through our representative in Switzerland, CACEIS (Switzerland), S.A., Route de Signy 35, CH-1260 Nyon. The paying agent is CACEIS Bank, Montrouge, Nyon Branch / Switzerland, Route de Signy 35, 1260 Nyon.

The Management Company can cease promotion in your country anytime. Investors have access to a summary of their rights in English on the following links: UK ; Switzerland ; France ; Luxembourg ; Sweden.

For Carmignac Portfolio Long-Short European Equities: Carmignac Gestion Luxembourg SA in its capacity as the Management Company for Carmignac Portfolio, has delegated the investment management of this Sub-Fund to White Creek Capital LLP (Registered in England and Wales with number OCC447169) from 2nd May 2024. White Creek Capital LLP is authorised and regulated by the Financial Conduct Authority with FRN : 998349.

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.