Carmignac Portfolio Asia Discovery

In January, the Asian markets posted mixed returns, with the South Korean KOSPI index being up while the BSE SENX 30 being down.

After three years of positive trends, the Indian markets declined in January due to profit-taking, unlike South Korea, which saw its market grow after a negative year.

On the geopolitical front, Trump wants to implement significant tariff measures on his main trading partners. As a result, the US president has threatened all BRICS countries with 100% tariffs if they try to replace the dollar as the currency of international trade.

Although artificial intelligence stocks were turbulent at the end of the period due to the DeepSeek announcement, they still ended the month in positive territory.

In this context, our fund delivered a negative performance in January, underperforming its reference indicator.

Our portfolio of Indian stocks weighed on the strategy after posting an excellent performance in 2024. In this respect, our main detractors were Zinka Logistics, Waaree Energies and Kfin Technologies.

Our position in the consumer company Cimory also weighed on the portfolio in January. Although the company reported satisfactory profit growth, potential tax increases on sugary drinks in Indonesia could weigh on the company's profit margins.

Nevertheless, we benefited from the strong growth of our stocks operating in the artificial intelligence value chain, particularly South Korea's SK Hynix and Taiwan's TSMC, both of which published satisfactory and promising results.

Emerging Asia is home to a vast and diverse universe that offers fertile ground for stock picking and attractive growth prospects.

We remain constructive on emerging small and mid-caps due to encouraging macroeconomic indicators, where we are mainly positioned. Nevertheless, we believe that the return of Donald Trump represents a risk for some emerging economies.

India remains our main geographical conviction and an excellent market for finding long-term compounding growth stocks. We maintain significant exposure to artificial intelligence stocks, particularly to companies in the semiconductor value chain in Taiwan and Korea.

Nevertheless, in the short term, we remain cautious with regard to India and AI due to their recent very good performances and valuation levels.

Over the month, following the correction of the Indian markets, we took profits on some of our positions and took advantage of this downturn to reinforce others where we believe this movement was exaggerated. In this respect, we initiated a position in the company TD Power Systems, a manufacturer of air conditioning generators and electric motors for various applications.