Carmignac Patrimoine: Letter from the Fund Managers
Carmignac Patrimoine A EUR Acc delivered a performance of +1.46% in the first quarter of 2025, outperforming its reference indicator, which declined by -2.56%.
Market environment during the period
Everything's been Trumped. The year-end optimism, driven by hopes of a pro-business Trump 2.0 administration, quickly faded during the first quarter.
The first shock came from China. The country demonstrated its determination to challenge American technological dominance. The DeepSeek project provided investors with a prime opportunity to cash in on American tech stocks, which had enjoyed years of strong performance.
Next came the second act. Germany’s new chancellor announced an ambitious €500 billion investment plan focused on infrastructure and defence—an amount equivalent to Austria’s annual GDP. This bold move shattered Germany’s long-standing “debt brake” policy and signaled a potential European revival, something Mario Draghi had long advocated for without success.
Finally, the United States delivered the final blow. The Trump administration’s threat of new tariffs triggered heightened market volatility, causing investors to question the idea of American exceptionalism. This uncertainty led to a reversal in key U.S. economic indicators, raising fears of a stagflationary environment.
In the markets, this quarter marked a turning point for global dynamics. Europe surged ahead, buoyed by its domestic sectors. Even the European bond market felt the impact: German Bunds saw their largest daily spike since the fall of the Berlin Wall, while the euro made significant gains against the dollar. China also thrived as investor enthusiasm for its tech sector grew. Emerging markets benefited from a weakened dollar as well. Meanwhile, the United States emerged as the big loser of the quarter. Former market darlings—particularly tech stocks—dropped more than 10% from their recent highs. Concerns over an economic slowdown pushed interest rates lower, but inflationary pressures remained strong. Gold, a traditional safe haven during times of political and geopolitical turmoil, continued its upward trajectory after a record-breaking 2024.
This turbulent quarter reflected a shift in global power dynamics: Europe is reawakening, China is becoming more assertive, and the United States is grappling with the consequences of its own strategic decisions.
How did we fare in this context?
In a volatile environment marked by declining U.S. markets, Carmignac Patrimoine delivered strong performance, ending the quarter on a positive note.
While our long-term equity investments in the technology sector faced challenges, our diversification strategies played a crucial role in offsetting these losses. Exposure to emerging markets and Europe proved advantageous, benefiting from more favourable market dynamics. Positions in gold stocks also performed well, driven by renewed demand for safe-haven assets amid uncertainty. Additionally, our active hedging strategies added value: put options on equity indices and specific stocks allowed us to capitalize on tactical opportunities, while our exposure to the VIX (volatility index) effectively mitigated market fluctuations. These strategic decisions contributed significantly to the Fund’s outperformance in equities.
Our bond positioning was another key contributor to performance. A long position on U.S. rates, which eased during the quarter, generated positive returns, while timely short positions on European rates benefited from developments in Germany. At the same time, concerns over tariffs and their potential inflationary effects supported our inflation-linked strategies, which performed strongly. Credit carry strategies also delivered steady returns, reflecting the high quality of the issuers we selected.
Finally, increased exposure to the euro further boosted performance. By diversifying our performance drivers while staying true to our core convictions, we successfully protected invested capital and achieved returns that exceeded the Fund’s reference indicator.
Outlook & positioning
We are entering a new era shaped by the Trump 2.0 administration. While this period is marked by uncertainty, certain trends are already beginning to take shape. The trade war initiated by the new administration, combined with a tentative deficit reduction plan, is steering the United States toward a stagflationary environment—unless Trump changes course. In Europe, significant investments in infrastructure and defence point to potentially stronger growth, albeit accompanied by higher budget deficits. However, retaliatory measures and escalating trade tensions could temporarily slow this growth momentum.
In this context, we anticipate increased volatility in risk assets and have adopted a cautious stance on equities and credit. We have strengthened our hedging strategies, reducing our net equity exposure to around 25%. That said, the current environment may present interesting opportunities in specific stocks, particularly within the technology sector. We are investing selectively in these areas while maintaining options to ensure balanced overall exposure. Additionally, following a notable rally in non-U.S. markets, we are rebalancing our geographic equity allocation, anticipating that this outperformance may wane if global economic prospects deteriorate. In credit markets, given high valuations, we took profits on financials in February and March while increasing protections through Xover.
For sovereign rates, given the current instability, we are maintaining a low modified duration while preserving flexibility. Optional strategies remain a key tool, offering both convexity and protection. At the same time, we favour real rates, which could benefit from upward revisions in inflation expectations driven by tariff barriers and retaliatory trade measures. Lastly, we are maintaining our exposure to the euro due to the dollar’s high valuation and because this time, economic turbulence is originating from the United States.
This approach allows us to maintain a resilient portfolio focused primarily on capital preservation in an uncertain environment over the coming weeks.
Carmignac Patrimoine
Carmignac Patrimoine A EUR Acc
- Recommended minimum investment horizon
- 3 years
- Risk indicator*
- 3/7
- 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
Fees
- 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
- 0.32% 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 Patrimoine | +1.5 | +7.1 | +2.2 | −9.4 | −0.9 | +12.4 | +10.5 | −11.3 | +0.1 | +3.9 |
| Reference Indicator | −2.6 | +11.4 | +7.7 | −10.3 | +13.3 | +5.2 | +18.2 | −0.1 | +1.5 | +8.1 |
| Carmignac Patrimoine | +2.8% | +3.6% | +0.2% |
| Reference Indicator | +2.7% | +6.3% | +4.5% |
Source: Carmignac at Mar 31, 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: 40% MSCI AC World NR index + 40% ICE BofA Global Government Index + 20% €STR Capitalized Index. Rebalancing Frequency: Quarterly