Carmignac Portfolio Credit

• Strong data in the United States supported the markets. Second-quarter GDP rebounded more than expected to +3.0%, while core PCE inflation rose +0.3% month-on-month.• The U.S. Congress approved the Trump administration’s budget plan, “One Big Beautiful Bill.” This costly tax reform is expected to drive the U.S. annual deficit to a threshold of 7% of GDP over the next decade. The implementation of tariffs should partially offset this additional cost, particularly after trade agreements were signed in July with certain Asian countries and members of the Eurozone.
• At the same time, the US Federal Reserve kept its rates unchanged at 4.25–4.50% for the fifth consecutive meeting, reaffirming its cautious “wait-and-see” stance and showing no urgency to proceed with further rate cuts.
• The European Central Bank paused its easing cycle after eight consecutive rate cuts, keeping the deposit rate at 2.0%. The growth outlook for the eurozone rose to an 11-month high, with leading PMI indicators in expansionary territory.
• Rates rose in July on the back of resilient growth prospects on both sides of the Atlantic. The US 10-year rate rose by +15 bp and its German counterpart by +9 bp.

• The Fund delivered a performance significantly above its benchmark in July, benefiting fully from the tightening of credit spreads.'•Our rigorous security selection proved particularly effective, with a positive contribution from our investments in special situations.
'•In July, we took advantage of the strength in the primary market to redeploy subscription proceeds into new opportunities.
'•Finally, we maintain an exposure of approximately 9% of the Fund's net assets to collateralized loan obligations (CLOs), which have been performing steadily.

• We remain focused on our core investment themes through a selection of high-yield bonds, energy, financials and our CLO selection. • Given the current valuation levels in credit markets, we are maintaining a high level of market coverage, which now accounts for 17.4% of the Fund's net assets.
• After years of weakness due to abundant liquidity and low capital costs, default rates are expected to return to more normal levels, which we see as a catalyst for creating real idiosyncratic opportunities.
Finally, the portfolio's high carry (around 6.1%) and attractive credit valuations should mitigate short-term volatility and help generate mediu to long-term performance.