Carmignac Portfolio Emergents: Letter from the Fund Managers - Q2 2026
During the second quarter of 2026, Carmignac Portfolio Emergents gained 29.9%, compared with a gain of 25.0% for its reference indicator. Since the beginning of the year, the Fund has returned 32.7%, versus 27.2% for its benchmark, representing an outperformance of 5.5%.
It is also worth highlighting that emerging market equities have significantly outperformed developed markets since the start of the year, by more than 14%4, in line with the scenario we predicted at the beginning of the year. This marks the second consecutive year of emerging market outperformance.
Market environment
The strong performance of emerging markets since the beginning of 2025 has been driven largely by the rapid expansion of artificial intelligence (AI). Two major events acted as powerful catalysts for the asset class. The first was the "DeepSeek moment" in January 2025, which demonstrated China's ability to compete with leading US companies in the field of large language models. The second was the growing recognition that many of the primary beneficiaries of the AI revolution are located in North Asia.
In many ways, this new technological cycle marks the return of tangible assets over intangible ones. Investors have increasingly recognised that companies designing and manufacturing the critical infrastructure underpinning AI are likely to capture a greater share of value creation than those focused solely on software applications and services. This represents a notable shift from the internet revolution, when platforms and consumer brands such as Facebook or Instagram captured a significant proportion of market value.
Today, hardware sits at the centre of the AI ecosystem. Nvidia's graphics processing units, for example, are all manufactured by Taiwan Semiconductor Manufacturing Company (TSMC) (9.8% of the Fund's net assets as of 30 June 2026). High Bandwidth Memory (HBM), an essential component powering Nvidia's most advanced chips, is produced almost exclusively by the Korean companies SK Hynix and Samsung Electronics. Alongside these leaders, a broad ecosystem of Taiwanese companies specialising in semiconductor equipment, advanced components and manufacturing processes have become deeply embedded within the global AI value chain. As a result, Asia offers investors multiple ways to gain exposure to the potential winners of the AI revolution, extending well beyond software and internet businesses.
Performance review
Against this backdrop, the Fund's performance was largely driven by our exposure to the Korean memory sector through three core holdings: Samsung Electronics, SK Hynix and its parent company, SK Square.
SK Square owns a 20.5% stake in SK Hynix and has publicly committed to reducing the holding company discount that has historically weighed on its valuation. This strategy has proved highly successful. Since the beginning of the year, SK Square has outperformed SK Hynix, allowing the fund to benefit from the appreciation of SK Hynix both directly through our investment in the company and indirectly through our holding in its parent company.
Towards the end of the second quarter, however, we took significant profits in both SK Hynix and SK Square, notably following the announcement of SK Hynix's planned listing on the New York Stock Exchange. We believe this dual listing should contribute to a gradual re-rating of the company by narrowing the valuation gap with its US peer Micron, which currently trades at approximately a 50% valuation premium to its Korean counterparts.
Portfolio changes
During the quarter, we added four new positions to the portfolio, reflecting both our extensive fundamental research and our recent research trips across Asia. These include the Chinese company Shenzhen Han's CNC, as well as the Taiwanese companies Grand Process Technology (GPTC), BizLink and Universal Microwave Technology (UMT). These investments reflect our objective of identifying, at an early stage, the companies we believe are best positioned to benefit from the structural trends reshaping Asia's technology ecosystem.
Shenzhen Han's CNC is a leading Chinese manufacturer of high-precision computer numerical control (CNC) machine tools, serving the electronics, automotive, aerospace and industrial equipment industries. We believe the company is well positioned to benefit from the continued upgrading of China's manufacturing base and the growing demand for high-end production equipment.
GPTC is a Taiwanese leader in wet process equipment for the semiconductor industry. Based in Hsinchu, at the heart of TSMC's ecosystem, the company designs wafer cleaning, chemical etching and surface treatment systems used in the production of advanced semiconductors, advanced packaging and optoelectronics.
BizLink is a global leader in interconnect solutions, specialising in the design and manufacture of cables, connectors, wiring harnesses and connectivity solutions for data centres, semiconductor equipment, electric vehicles, industrial applications and the medical sector. We believe the company is ideally positioned to benefit from the rapid expansion of next-generation data centres and AI-related infrastructure.
Finally, UMT is a Taiwanese specialist in radio frequency (RF) and microwave components and modules used in telecommunications infrastructure, wireless networks, defence systems and satellite applications.
We also increased our position in the Mexican consumer company Tiendas BBB, which we initiated during the first quarter. We took advantage of a large secondary share placement in May to increase our investment at what we believe were particularly attractive valuation levels.
Our exposure to Latin America was reduced during the quarter and at the quarter end represents 13.0% of the portfolio (versus 6.4% for the reference indicator). This reflects two factors. Firstly, the outstanding performance of the Taiwanese and Korean markets mechanically reduced the relative weight of our holdings in other regions. Secondly, we have adopted a more cautious stance ahead of Brazil's presidential election in October and against the backdrop of ongoing negotiations between Mexico, the United States and Canada regarding the renewal of the USMCA trade agreement.
Outlook for the coming months
We believe emerging markets have entered a new multi-year cycle, supported by stronger fundamentals, earnings growth that continues to outpace developed markets, and valuations that still trade at a 43% discount to US equities5. Despite the strong rally since the beginning of the year, the asset class continues to offer significant re-rating potential, particularly as global investors remain structurally underallocated to emerging markets.
Beyond the cyclical backdrop, emerging markets continue to benefit from multiple structural growth drivers. Asia remains at the centre of global innovation, powered by AI, semiconductors, automation and the broader industrial revolution. At the same time, Latin America continues to benefit from favourable commodity exposure and resilient macroeconomic fundamentals. We believe this diversity of growth engines is one of the asset class's greatest strengths.
We remain particularly constructive on the Asian AI ecosystem. However, following the exceptional performance of memory-related stocks, we have adopted a more selective approach. While maintaining meaningful exposure to this long-term structural theme, we have reduced certain positions to preserve valuation discipline and actively manage portfolio risk. We continue to favour companies positioned to benefit from the next phase of the AI cycle, including technology infrastructure, connectivity, power management and industrial equipment.
We also continue to diversify our sources of alpha by increasing our exposure to attractive domestic opportunities in Mexico, alongside high-quality industrial leaders in China.
Finally, we believe the current environment will remain characterised by significant dispersion across countries, sectors and individual companies. In such a market, stock selection, valuation discipline and active portfolio management remain the primary drivers of alpha generation. Our investment philosophy remains unchanged: to build a balanced portfolio around multiple complementary growth engines while investing in companies capable of delivering sustainable earnings growth, strong cash flow generation and long-term value creation for shareholders.
1Carmignac Portfolio Emergents F EUR Acc (ISIN: LU0992626480).
2Reference indicator: MSCI EM NR USD) (Reinvested net dividends rebalanced quarterly. Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor).
3Source: Carmignac. Morningstar. ©2026 Morningstar. Inc - All rights reserved. Values are in EUR as of 30/06/2026. Active share for the fund in the Morningstar Global EM Equity Category.
4Source: Bloomberg, performance of the MSCI World NR index in EUR, from 31/12/2025 to 30/06/2026.
5Source: Bloomberg, as of 30/06/2026.
Sources: Carmignac, 30/06/2026.
Carmignac Portfolio Emergents
Carmignac Portfolio Emergents F EUR Acc
- Recommended minimum investment horizon
- 5 years
- Risk indicator*
- 4/7
- SFDR - Fund Classification**
- Article 9
*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
- We do not charge an entry fee.
- Exit costs
- We do not charge an exit fee for this product.
- Management fees and other administrative or operating costs
- 1.15% 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
- 0.39% 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 Emergents | +32.7 | +23.6 | +5.5 | +9.8 | −14.3 | −10.3 | +44.9 | +25.5 | −18.2 | +19.8 |
| Reference Indicator | +27.2 | +17.8 | +14.7 | +6.1 | −14.9 | +4.9 | +8.5 | +20.6 | −10.3 | +20.6 |
| Carmignac Portfolio Emergents | +22.2% | +6.6% | +10.1% |
| Reference Indicator | +21.1% | +8.0% | +9.8% |
Source: Carmignac at Jun 30, 2026.
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.
Reference Indicator: MSCI EM NR index
Marketing communication. Please refer to the KID/KIID, prospectus of the fund before making any final investment decisions. This document is intended for professional clients.
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.
Morningstar Rating™ : © 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.
Access to the Funds may be subject to restrictions regarding certain persons or countries. This material is not directed to any person in any jurisdiction where (by reason of that person’s nationality, residence or otherwise) the material or availability of this material is prohibited. Persons in respect of whom such prohibitions apply must not access this material. Taxation depends on the situation of the individual. The Funds are not registered for retail distribution in Asia, in Japan, in North America, nor are they registered in South America. Carmignac Funds are registered in Singapore as restricted foreign scheme (for professional clients only). The Funds have not been registered under the US Securities Act of 1933. The Funds 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 FATCA.
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.
In Belgium: This document is intended for professional clients. This content has not been validated by FSMA. The decision to invest in the promoted fund should take into account all its characteristics or objectives as described in its prospectus. 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 information contained in this document may be partial and could be changed without notice. This document may not be reproduced in whole or in part without prior authorisation. 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. The Fund (fonds commun de placement or FCP) is a common fund in contractual form conforming to the UCITS Directive under French law. Access to the Fund may be subject to restrictions regarding certain persons or countries. The Funds are not registered for retail distribution in Asia, in Japan, in North America, nor are they registered in South America. Carmignac Funds are registered in Singapore as restricted foreign scheme (for professional clients only). The Funds have not been registered under the US Securities Act of 1933. The Funds 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 FATCA. 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.
The Management Company can cease promotion in your country anytime. Investors have access to a summary of their rights at section 5 entitled "summary of investor rights" on the following links: UK ; Switzerland ; France ; Luxembourg ; Sweden. Belgium (French) ; Belgium (Dutch)
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.