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Carmignac Sécurité: Letter from the Fund Managers

Author(s)
Marie-Anne ALLIER,Aymeric GUEDY
Published on
April 14, 2025
+0.73%
Carmignac Sécurité’s performance in the 1st quarter of 2025 vs +0.70% for its reference indicator1 (AW EUR Acc Share class).
+4.58%
Carmignac Sécurité’s Performance over 1-year vs +4.00% for its reference indicator (AW EUR Acc Share class).
1st quartile
of its Morningstar category2 over 1, 2, 3, 5, 10 and 20 years (category: EUR Diversified Bond – Short Term - AW EUR Acc Share class).

In the first quarter of 2025, Carmignac Sécurité posted a performance of +0.73%, compared with +0.70% for its reference indicator.

Market review and portfolio allocation

Volatility has returned to the markets, fuelled in particular by a Donald Trump who has shed his inhibitions and is determined to reshape the world order with his 'America first' slogan. First, by forcing Volodymyr Zelensky to the negotiating table in the humiliating absence of Europe. Then by unleashing a trade war unprecedented in modern history. These two major electric shocks to Europe can only lead to more European independence, especially in military terms, and therefore to more spending. This surge has already begun in Germany. The new chancellor, Friedrich Merz, has succeeded, against all odds and before the new parliament has been formed, in pushing through a fiscal stimulus package second only to the post-war Marshall Plan and the reunification plan of the 1990s. After sixteen years of budgetary orthodoxy and two years of recession, it has unleashed EUR 500 billion of infrastructure spending and significantly eased the constitutional budgetary constraints on defence. For its part, the ECB has continued its cycle of interest rate cuts, bringing them down to 2.5%. It is encouraged by the return of inflation to target by the end of the year and is wary of the downside risks to European growth from the trade war.

In this context, German interest rates experienced a record spike following the announcement of the new Merz plan. The 10-year rate jumped by more than 40 basis points in 24 hours, roughly equivalent to the increase recorded over the quarter. The curve steepened sharply, with the two-year rate remaining relatively stable over the period. Indeed, the German budgetary measures mark a real turning point for growth in Germany, which could now reach 2% by 2027. However, these will take time to unfold and the tariffs threaten the near-term growth outlook, paving the way for further rate cuts by an ECB that is more reactive than proactive.
Supported by upward revisions to medium-term growth in Europe, credit spreads have also shown resilience, rising just 5bp on high yield and even falling 5bp on 10-year Italian government bonds. By contrast, US rates have fallen sharply, by 37 basis points on the 10-year, as budget cuts and the trade war erode the American exceptionalism that has prevailed in recent years.

Performance Review

The carry remains the main source of performance for Carmignac Sécurité. With a yield at maturity fluctuating between 3.5% and 4% during the quarter, it contributed to the bulk of the quarterly performance. The Fund's duration remained within a narrow range, between 1.6 and 2.2, concentrated mainly on short maturities, i.e. less than 5 years. Thus, the rise in long-term interest rates had little impact on the Fund's performance. This was even more than offset by the compression of credit spreads within the credit component, which favoured the finance and energy sectors, as well as CLOs to a lesser extent.

What is our outlook for the coming months?

The first days of the second quarter were marked by Donald Trump's outburst on Liberation Day. The announced tariff barriers are finally higher than expected, with 20% in Europe and 74% in China, raised to 104% a few days later, to which China responded with tariffs of 84%. The trade war is therefore underway, creating a rush to safe havens, mainly German short-term bonds and gold, and massive sales of risky assets, including equities, credit and emerging markets. US Treasury bonds, meanwhile, are caught between the risk of inflation and the risk of recession. In this historically uncertain and volatile environment, Carmignac Sécurité relies on two sources of stability/visibility. Firstly, a balanced portfolio construction combining almost two-thirds of assets invested in corporate bonds offering an attractive yield, mainly with a good rating and short maturity, offset by almost 30% invested in money markets or cash equivalents, curve steepening positions, a duration of slightly less than 2 and credit protection on high yield. And finally, the carry is still attractive, with the Fund's average yield to maturity close to 4%.

Source: Carmignac, Bloomberg, 31/03/2025. Performance of the AW EUR acc share class ISIN code: FR0010149120. 1Reference indicator: ICE BofA ML 1-3 years All Euro Government Index. 2Morningstar Category: EUR Diversified Bond – Short Term, 31/03/2025.

Carmignac Sécurité

Flexible, low duration solution to navigate European fixed income markets
Discover the fund page

Carmignac Sécurité AW EUR Acc

ISIN: FR0010149120
Recommended minimum investment horizon
2 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. **Sustainable Finance Disclosure Regulation (SFDR) 2019/2088. The SFDR classification of the Funds may change over time.

Main risks of the fund

Interest Rate: Interest rate risk results in a decline in the net asset value in the event of changes in interest rates.
Credit: Credit risk is the risk that the issuer may default.
Risk of Capital Loss: The portfolio does not guarantee or protect the capital invested. Capital loss occurs when a unit is sold at a lower price than that paid at the time of purchase.
Currency: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments.
The Fund presents a risk of loss of capital. Please refer to the Fund’s prospectus to view the exhaustive list of risks.

Fees

ISIN: FR0010149120
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
1.11% of the value of your investment per year. This estimate is based on actual costs over the past year.
Performance fees
There is no performance fee for this product. 
Transaction Cost
0.11% 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

ISIN: FR0010149120
Carmignac Sécurité+0.7+5.3+4.1−4.8+0.2+2.0+3.6−3.0+0.0+2.1
Reference Indicator+0.7+3.2+3.4−4.8−0.7−0.2+0.1−0.3−0.4+0.3
Carmignac Sécurité+3.2%+2.4%+0.9%
Reference Indicator+1.1%+0.4%+0.1%

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: ICE BofA 1-3 Year All Euro Government index

Share

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.