Fixed income strategies

Carmignac Portfolio EM Debt

SICAVEmerging marketsSRI Fund Article 8
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LU2427320812

Exploit fixed income opportunities across the entire emerging universe
  • Access a wide range of performance drivers across the emerging universe: local debt, external debt and currencies.
  • A conviction-driven and non-benchmarked philosophy to uncover the attractive opportunities emerging markets have to offer.
Key documents
Asset Allocation
Bonds88.4 %
Other11.6 %
Data as of:  30 Apr 2024.
Risk Indicator
3/7
Recommended Minimum Investment Horizon
3 years
Cumulative Performance since launch
+ 8.6 %
-
-
-
+ 6.1 %
From 31/12/2022
To 23/05/2024
Calendar Year Performance 2023
-
-
-
-
-
-
-
-
- 7.3 %
+ 15.8 %
Net Asset Value
108.6 $
Asset Under Management
242 M $
Market
Emerging markets
SFDR - Fund Classification

Article

8
Data as of:  23 May 2024.
​Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor).

Carmignac Portfolio EM Debt fund performance

Take a look at the Fund's performance supported by our Fund managers’ market commentary and strategy insight.

Our monthly comments

Data as of:  30 Apr 2024.
Fund management team

Abdelak Adjriou

Fund Manager

Alessandra Alecci

Fund Manager

Market environment

The widening gap between monetary policies on each side of the Atlantic, intensification of geopolitical risk (escalation of reprisals in the Middle East) and doggedness of inflation (in part due to commodity prices) led to a bond market correction in April. Government bond yields shot up, especially in the United States where the 2yr hit 5%. This has mainly come about because the US economy is outperforming and, in particular, US employment data for March was very strong (303,000 job starts). Although GDP growth slowed in the first quarter (annualised rate of 1.6% q/q), it seems that employment, inflation and to some extent personal consumer expenditure (+2.7% y/y) had a greater influence on market developments.

Investors lowered their rate-cutting expectations as the FOMC meeting approached. Some even fear an increase in the Fed Funds rate if growth stays close to 3%.

Economic growth is much less robust in the Eurozone, although it has stabilised and in some areas, especially services, is even starting to pick up.

Despite the Chinese government’s limited attempts to stimulate its economy and the need for consolidation, the latest figures support the idea of a global economy recovery.

On foreign exchange markets the US dollar appreciated, mainly because the US economy is outperforming and investors have lowered their expectation of Fed Fund rate cuts. The yen was the big loser, closing at a level unseen since 1990 despite Japanese authorities’ attempts to shore up the national currency.

Performance commentary

The Fund delivered a negative monthly performance, though beat its reference indicator. Our corporate bond allocation was the main positive contributor to the portfolio’s performance. However, our positive modified duration weighed on performance, especially through our long position on Mexican and Brazilian local debt. Debt denominated in hard currency posted a slightly positive performance over the month. Our foreign exchange strategies had a neutral impact on the Fund’s absolute return. Our long position on the Japanese yen and short position on the Chinese yuan proved detrimental, but our long position on the Chilean peso helped the portfolio.

Outlook strategy

In the current economic climate, our modified duration is around 385 basis points, slightly lower than it was in March. At a local debt level, we remain focused on countries like Mexico, where the rate-cutting cycle has started and is likely to continue. We are also long on Brazil where real interest rates are still very high. Bonds in China, where we are expecting more easing, look good too.
The global economic recovery continues to support commodities such as copper and oil, which should benefit emerging market debt and the currencies of emerging commodity-producing countries. We therefore have positive expectations for the Brazilian real and Chilean peso, as well as certain Asian currencies such as the won, as AI should lift the South Korean economy, and the Indian rupee, on account of India’s strong economic growth.

We are long on emerging market debt denominated in hard currencies, but have been taking profits on our best performing positions, such as those in Ecuador and Romania, since the beginning of the year.

Performance Overview

Data as of:  23 May 2024.
​Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). 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.
Source: Carmignac at 25/05/2024

Carmignac Portfolio EM Debt Portfolio overview

Below is an overview of the composition of the portfolio.

Geographical Breakdown

Data as of:  30 Apr 2024.
Latin America36.7 %
Eastern Europe24.0 %
Africa14.4 %
Asia6.8 %
Europe5.5 %
Middle East5.2 %
North America4.3 %
Asia-Pacific3.1 %
Total % of bonds100.0 %
Latin America36.7 %
mxMexico
23.6 %
coColombia
4.7 %
République Dominicaine
4.2 %
arArgentina
2.4 %
Pérou
0.6 %
Ecuador
0.5 %
clChile
0.3 %
Brésil
0.2 %
crCosta Rica
0.1 %

Key figures

Below are the key figures for the Fund, which will give you a clearer idea of the Fund's management and bond positioning.

Exposure Data

Data as of:  30 Apr 2024.
Modified Duration3.5
Yield to Worst6.8 %
Yield to Maturity6.9 %
Average Coupon5.4 %
Number of Issuers56
Number of Bonds76
Average RatingBBB-

The strategy in a nutshell

Discover the Fund’s main features and benefits through the words of the Fund Managers.
Fund Management Team

Abdelak Adjriou

Fund Manager

Alessandra Alecci

Fund Manager
The Fund is best suited for fixed income investors looking for higher returns than those offered by developed markets, by taking advantage of the emerging universe potential.

Abdelak Adjriou

Fund Manager
View Fund's characteristics
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.
Carmignac Portfolio is a sub-fund of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive.