Carmignac Investissement Latitude

Markets have been climbing the wall of worry for most of the summer.

In August 2025, equity markets posted solid gains globally, with major indices such as the S&P 500 and Nasdaq reaching new record highs. These gains were primarily driven by a small group of mega-cap technology firms, including Nvidia, Microsoft, Apple, and Amazon.

At Jackson Hole, following the release of July’s US non-farm payrolls—which suggested a slowing labour market—Powell opened the door to potential mid-September rate cuts. This fueled expectations of an aggressive cutting cycle.

European markets underperformed in local currencies, with France lagging in particular due to political uncertainties.

Chinese onshore equities rose to decade highs, supported by optimism around anti-involution reforms, strength in the technology sector, and incremental government measures aimed at boosting the equity market.

The euro appreciated against the dollar over the period, creating a divergence between local currency and euro-denominated index performances.

In August, our strategy posted a slightly negative performance, while its reference indicator recorded a moderate gain.

The portfolio’s technology holdings linked to artificial intelligence (TSMC, Nvidia, SK Hynix) weighed on performance after an excellent start to the year.

Alphabet was the main positive contributor, supported by very strong Q2 2025 results, driven by the accelerated integration of AI across its businesses and the growth of its cloud segment.

Conversely, our selection of financial stocks (Tradeweb, ICE) as well as our healthcare holdings (Vertex, Lantheus, McKesson) detracted from performance, despite the modest rebound of Novo Nordisk.

Finally, our hedges on U.S. equity markets weighed on the strategy, while our defensive positioning on the dollar contributed positively.

Risk backdrop remains supportive: loose financial conditions, strong buyback activity, fading tariff risks, and retail flows

AI capex outlook: hyperscaler investments are projected to rise by +49% in 2025 and +18% in 2026, providing a strong market tailwind.

Valuations: historically elevated levels raise concerns around market frothiness and increase vulnerability to higher (real) yields.

The main investment themes of Carmignac Investissement are the following:
o Artificial Intelligence: Demand is accelerating from hyperscalers and governments at the start of the innovation cycle, while supply remains constrained. Our exposure is diversified across electronics & semiconductors and AI applications in Asia and the US.
o Industrials: We focus on companies benefiting from structural themes such as electrification, reindustrialisation, and aerospace, with a preference for European exposure supported by German fiscal stimulus.
o Financials: We are increasing allocation to quality names (S&P Global, Mastercard, Tradeweb) while maintaining selective exposure to emerging market banks (Kotak Mahindra, Itaú Unibanco, Banorte).

In Carmignac Investissement Latitude, we continue to maintain a cautious stance on equity markets (60-70% equity exposure) and have hedged a significant portion of our U.S. dollar exposure.