Making flexibility the cornerstone of your bond portfolio
Today’s bond market is vast and harbours a wealth of opportunities, whether in sovereign or corporate bonds, in both high yield and investment grade and developed and emerging markets. The key to capturing the full potential of this market and turning it into solid risk-adjusted returns is an investment solution that combines asset allocation with bond picking, provided it also has the flexibility to adapt to different market conditions.
Our Carmignac Portfolio Flexible Bond fund offers a solution for managing your bond allocation. The Fund’s two managers since 2019 – Guillaume Rigeade and Eliezer Ben Zimra – have proven the strength of their know-how. Their robust investment process combines flexibility with active risk management and a search for performance.
Our Carmignac Portfolio Flexible Bond fund is designed to offer investors an investment solution for their core portfolio. It takes advantage of the broad diversity in the bond market to outperform its reference indicator2 over at least a three-year horizon. The portfolio is managed with a total return approach, seeking to capture market upswings while hedging against downside risk.
Thanks to this approach, the Fund has outperformed in just about every bond-market segment since the new managers took over in July 2019: corporate debt, emerging-market bonds, and sovereign bonds4.
The Fund’s investment process is based on three pillars: a vast investment universe, an active approach to managing modified duration, and a rigorous process for screening and selecting issuers based on pooling together a range of expertise.
A broad investment universe
Combining an unconstrained asset allocation with currency hedges
Carmignac Portfolio Flexible Bond can invest in the entire bond-market universe, meaning its managers can seize opportunities in a range of market segments and geographies while systematically hedging against currency risk. This flexibility enables its managers to adjust their positions at each stage of the business and financial-market cycle.
From theory ...
.
… to practice: what we have done in 2025
We started the year by investing primarily in assets with an attractive carry, such as high yield corporate bonds and financial subordinated debt, in light of the stretched valuations. Then as Trump’s Liberation Day approached, we took profits on some of these positions and shored up our hedging strategies on high yield bonds.
By tactically reducing our exposure to risk assets in this way, we were able to ride out the spike in risk aversion in the first quarter. After this stress peaked early in the second quarter, we sold some of our high yield hedges and positioned the Fund for a market rebound, which we captured in the latter part of the second quarter, in line with our focus on total return.
We also invested in inflation-linked bonds, which proved to be another significant performance driver as long-term yields rose and inflation expectations remained relatively low in light of the stimulus plans announced by various governments.
Our carry and directional strategies have contributed equally to our performance so far this year.
Active approach to modified duration
Moving swiftly in response to interest rate movements
Carmignac Portfolio Flexible Bond has a wide modified duration range (from –3 to +8), which gives its managers the flexibility to benefit from both rising and falling interest rates while implementing hedging strategies when needed.
From theory ...
… to practice: what we have done in 2025
This performance driver has been particularly effective over the past few months, when our modified duration ranged from –2.9 to 4.5. This flexibility in managing our positions reflects our in-depth reading of the fundamentals and market prices.
In the first quarter, our short positions on European bonds generated significant absolute and relative returns after German bond yields rose on the back of the infrastructure and defence spending plan announced by new Chancellor Friedrich Merz.
We adjusted our positions on US bonds in response to the signals sent out by the Trump administration. We were initially long, as investors expected American exceptionalism to continue, but switched to a short position (on both long- and short-dated issues) after Liberation Day when investors became overly bearish on the growth prospects for the US economy.
We are still short Japanese bonds – a position that continues to benefit our performance – as yields are being pushed upwards by the changing inflationary environment in the country and the Bank of Japan’s new cycle of monetary tightening.
Bond picking based on pooled expertise
Building a portfolio of our strongest convictions
The Fund Managers of Carmignac Portfolio Flexible Bond work closely with the entire Carmignac fixed income team, and in particular with our credit and emerging market debt specialists, tapping into their knowledge to identify the most promising opportunities within each of their respective areas.
From theory …
… to practice: what we have done in 2025
- The insight from our experts has enabled us to pinpoint attractive opportunities and benefit from a “complexity premium” – that is, the additional return offered on debt instruments that are particularly hard to analyse, value, or structure.
- Of the 169 issuers making up our credit and emerging market investments in 2025, a particular focus is on financial firms, as we believe their debt offers an attractive risk/return profile.
- Financials are still tainted by the 2008 crisis and offer attractive risk-adjusted premiums, backed by their healthier balance sheets. European banks now have nearly three times as much equity as in 2008 and generate higher profit margins, amid a regulatory environment has become stricter for banks and an operating environment that has become more favourable.
- The pace of consolidation has picked up in the finance industry with numerous domestic and cross-border mergers announced.
- All this has prompted us to explore opportunities across European banks’ entire capital structure. We are looking in particular at subordinated debt, which offers higher returns than those on high yield paper and, in many cases, an investment grade rating.
The flexibility to ride through cyclical swings
FLEXIBILITY: A KEY STRENGTH IN RISK MANAGEMENT
Thanks to the Fund’s vast investment universe and the considerable flexibility it offers in setting asset allocations, we are able to actively manage the portfolio’s financial risks. This is especially useful in times of high volatility, such as during the sharp bond market corrections in the eurozone and the US in March and April of this year. Our Fund Managers use sophisticated analysis software and draw on the expertise of Carmignac’s risk management department, which is integrated directly into our front office. This department plays an important role in monitoring and improving our overall portfolio construction.
In addition to financial criteria, we also evaluate potential investments according to environmental, social, and governance (ESG) factors, in order to mitigate potential risks in these areas. For instance, we screened out 20% of the investment universe by excluding the worst-rated issuers on ESG metrics, based on both our own analyses and data from external providers. We also meet with some of the companies whose bonds we hold in order to help them improve their ESG practices.
Carmignac Portfolio Flexible Bond
1Guillaume Rigeade and Eliezer Ben Zimra joined the Carmignac bond team on 09/07/2019.
22Reference indicator: ICE BofA Euro Broad Market Index (income reinvested) since 30/09/2019, replacing the EONCAPL7 index. Returns are calculated using the chaining method.
3Morningstar category: EUR Flexible Bond.
4 Sources: Carmignac, ICE Bank of America, Bloomberg, 30/09/2025. Past performance is not a reliable indicator of future performance. Global corporate bond index: Bloomberg Global Aggregate Corporate Total Return Index Hedged EUR; emerging-market bond index: Bloomberg Barclays MSCI EM Hard Currency Aggregate EUR; high-yield bond index: Bloomberg Global High Yield Total Return Index Value Hedged EUR; sovereign bond index: Bloomberg Global Aggregate Treasuries Total Return Index Hedged EUR.
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- Recommended minimum investment horizon
- 3 years
- Risk indicator*
- 2/7
- 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. **The Sustainable Finance Disclosure Regulation (SFDR) 2019/2088 is a European regulation that requires asset managers to classify their funds as either 'Article 8' funds, which promote environmental and social characteristics, 'Article 9' funds, which make sustainable investments with measurable objectives, or 'Article 6' funds, which do not necessarily have a sustainability objective. For more information please refer to https://eur-lex.europa.eu/eli/reg/2019/2088/oj.
Main risks of the fund
Fees
- Entry costs
- 1.00% 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
- 1.22% 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
- 0.35% 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
| Carmignac Portfolio Flexible Bond | 0.1 | 1.7 | -3.4 | 5.0 | 9.2 | 0.0 | -8.0 | 4.7 | 5.4 | 4.6 |
| Reference Indicator | -0.3 | -0.4 | -0.4 | -2.5 | 4.0 | -2.8 | -16.9 | 6.8 | 2.6 | 1.1 |
| Carmignac Portfolio Flexible Bond | + 6.7 % | + 1.9 % | + 1.7 % |
| Reference Indicator | + 3.2 % | - 2.0 % | - 1.1 % |
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).
Reference Indicator: ICE BofA Euro Broad Market index
MARKETING COMMUNICATION. Please refer to the KID/prospectus of the Fund before making any final investment decisions.
This document may not be reproduced, in whole or in part, without prior authorisation from the management company. It does not constitute a subscription offer, nor does it constitute investment advice. The information contained in this document may be partial information and may be modified without prior notice. The Management Company can cease promotion in your country anytime. Investors have access to a summary of their rights in French, English, German, Dutch, Spanish, Italian at the following link (paragraph 5 “Summary of investor rights”): https://www.carmignac.com/en/regulatory-information.
The decision to invest in the promoted fund should take into account all its characteristics or objectives as described in its prospectus. Carmignac Portfolio Flexible Bond is a sub-fund of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive. The reference to a ranking or prize, is no guarantee of the future results of the UCITS or the manager. 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. Access to the Fund may be subject to restrictions with regard to certain persons or countries. Morningstar Rating™ : © 2025 Morningstar, Inc. All Rights Reserved. The information contained herein: is proprietary to Morningstar and/or its content providers; may not be copied or distributed; and is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The Fund is not registered in North America, nor in South America. The Fund has not been registered under the US Securities Act of 1933. The Fund may not be offered or sold, directly or indirectly, for the benefit or on behalf of a "U.S. person", according to the definition of the US Regulation S and/or FATCA. The Fund presents a risk of loss of capital. The risks, fees and ongoing charges are described in the KID (Key Information Document). The Fund's prospectus, KID, NAV and annual reports are available at www.carmignac.com or upon request to the Management Company.
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In Switzerland, the Fund’s prospectus, KID and annual reports 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, succursale de Nyon / Suisse, Route de Signy 35, 1260 Nyon. The KID must be made available to the subscriber prior to subscription.
In Belgium: This document has not been submitted to FSMA for validation. It is intended for professionals only. This communication is published by Carmignac Gestion S.A., a portfolio management company approved by the Autorité des Marchés Financiers (AMF) in France, and its Luxembourg subsidiary Carmignac Gestion Luxembourg, S.A., an investment fund management company approved by the Commission de Surveillance du Secteur Financier (CSSF). “Carmignac” is a registered trademark. “Investing in your Interest” is a slogan associated with the Carmignac trademark. This document does not constitute advice on any investment or arbitrage of transferable securities or any other asset management or investment product or service. The information and opinions contained in this document do not take into account investors’ specific individual circumstances and must never be interpreted as legal, tax or investment advice. The risks and fees are described in the KID (Key Information Document). The prospectus, KID, the net asset-values and the latest (semi-) annual management report may be obtained, free of charge, in French or in Dutch, from the management company (tel. +352 46 70 60 1) or by consulting its website or www.fundinfo.com. These materials may also be obtained from Caceis Belgium S.A., the financial service provider in Belgium, at the following address: avenue du port, 86c b320, B-1000 Brussels. In case of subscription to a fund subject to Article 19bis of the Belgian Income Tax Code (CIR92), the investor will have to pay, upon redemption of his or her shares, a withholding tax of 30% on the income (in the form of interest, or capital gains or losses) derived from the return on assets invested in debt claims. Distributions are subject to withholding tax of 30% without income distinction. In case of subscription in a French investment fund (fonds commun de placement or FCP), you must declare on tax form, each year, the share of the dividends (and interest, if applicable) received by the Fund. Any complaint may be referred to complaints@carmignac.com or CARMIGNAC GESTION - Compliance and Internal Controls - 24 place Vendôme Paris France or on the website www.ombudsfin.be.