Carmignac Portfolio Global Bond

• The announcement of a moratorium on tariffs between the US and China reignited risk appetite, resulting in a 50bp tightening of credit spreads on the Itraxx Xover index in May.- The Federal Reserve kept its key rates in the 4.25% to 4.50% range as the US labor market continued to show resilience with better-than-expected job creation and stable unemployment.
• In the eurozone, amid fragile economic growth, the ECB cut its rates by 0.25%, as expected by the market.
• In Japan, uncertainty continues to grow. Inflation reached 3.6% year-on-year at the end of April and long-term rates hit record highs following limited interest from domestic investors in Japanese bonds.
• Rates rose in May, particularly in the United States, where the 10-year rate rose by +24 bp, while its German counterpart rose by +6 bp.
• On the currency front, the dollar continued to fall against the euro due to US budget uncertainties. The renewed appetite for risk benefited certain emerging currencies, such as the Mexican peso, the Chilean peso, and the South African rand.

• During the month, the fund delivered a negative performance, in line with its benchmark.- Against a backdrop of rising core interest rates, the portfolio suffered mainly from its long positions in US and UK rates, while our short positions in German rates had a positive effect.
• Our exposure to corporate credit and our selection of emerging market debt denominated in hard currencies had a positive impact in a context of tightening credit spreads, but this was partly offset by the protections we put in place to reduce our exposure to this market.
• Finally, on the currency front, the sharp rise in the euro had a negative impact on our exposure to the US dollar, albeit limited, as well as on the Japanese yen and the pound sterling. However, we benefited from our positions in the South African rand and the Indonesian rupiah.

•In a context marked by uncertainty caused by the introduction of customs tariffs, geopolitical conflicts and budgetary issues for certain countries, we expect the major central banks in developed and emerging countries to maintain an accommodative stance. We are therefore maintaining a relatively high level of modified duration to interest rates.• In terms of rates, we favor real rates in the US, where the trade war could impact activity but also reignite inflation. We are also focusing on central banks that are behind in the cycle, such as the UK, but also on certain emerging countries, such as Brazil, which is also benefiting from high real rates, and on certain Eastern European countries. We also have short positions on Japanese rates, where inflation is starting to take hold, as well as in certain peripheral European countries, against a backdrop of high budget spending. • On credit, although this asset class offers an attractive carry, we are cautious due to relatively high valuations and are maintaining a significant level of coverage on the iTraxx Xover to protect the portfolio from the risk of widening spreads. • Finally, in currencies, we are maintaining relatively low exposure to the US dollar and limited exposure to emerging market currencies. Our currency selection includes Latin American currencies (BRL, CLP) as well as a selection of commodity-linked currencies (AUD, CAD, NOK). Finally, we are maintaining a long position on the Japanese yen, as the Bank of Japan is likely to be the only central bank to raise rates this year.