Fixed income strategies

Carmignac Portfolio EM Debt

SICAVEmerging marketsSRI Fund Article 8
Share Class

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
Bonds91 %
Other9 %
Data as of:  28 Mar 2024.
Risk Indicator
3/7
Recommended Minimum Investment Horizon
3 years
Cumulative Performance since launch
+ 8.9 %
-
-
-
+ 7.7 %
From 31/12/2022
To 11/04/2024
Calendar Year Performance 2023
-
-
-
-
-
-
-
-
- 7.3 %
+ 15.8 %
Net Asset Value
108.9 $
Asset Under Management
230 M €
Market
Emerging markets
SFDR - Fund Classification

Article

8
Data as of:  11 Apr 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:  29 Mar 2024.
Fund management team

Abdelak Adjriou

Fund Manager

Alessandra Alecci

Fund Manager

Market environment

At a global macroeconomic level, developed market central bank meetings held no big surprises in March, although the Bank of Japan did bring an end to its negative interest rate policy. However, the prospect of coordinated easing by the European Central Bank and the Federal Reserve seems to be receding as US growth and inflation figures remain higher than expected. Despite a dovish tone, the Federal Reserve has been forced to revise its growth forecasts upwards for the cycle ahead. The European Central Bank put out a reassuring measure by lowering its inflation forecasts, even though services inflation remains high at 4%.There were also a large number of central bank meetings in the emerging world. Most of these central banks adopted a slightly more hawkish tone. Although they cut interest rates further in Latin America, Most of them are now scaling back their easing, or taking a break. Although the local debt index (expressed in euro) was flat in March, emerging market debt denominated in hard currencies continued to perform well, largely because spreads narrowed by 24 basis points. Highlights of the month included the Egyptian central bank raising its deposit rate by 600 basis points and letting its currency float freely, leading to devaluation and a sharp rise in the value of Egyptian external debt following the provision of multilateral support from the IMF, the World Bank and the EU.

Performance commentary

The Fund delivered a positive return in March, beating its reference indicator. Our selection of emerging market debt denominated in hard currencies continued to perform well, helped by an improvement in the fundamentals of high yield issuers. The main sources of performance were Argentina, Ecuador, Ukraine, Romania and Ghana. The contribution from emerging market debt denominated in local currency was smaller, with Mexico and Poland the pick of the bunch. In contrast, our long positioning on South African bonds weighed on monthly performance. Corporate bonds made a positive contribution but we are keeping a high level of hedging as spreads are historically narrow. Our low modified duration was beneficial too. Our currency strategies had a slightly negative impact on performance, especially through our long position on the yen. However, the Hungarian forint and Kazakh tenge added to the Fund’s absolute return.

Outlook strategy

The latest macroeconomic indicators suggest that manufacturing activity has bottomed out in the United States, the Eurozone and China. This makes us all the more optimistic for 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 as well as certain Asian currencies such as the won, as AI should lift the South Korean economy. We remain long on emerging market debt denominated in hard currencies, but have been taking profits on our best performing positions since the beginning of the year. High yield issuers’ fundamentals improved, explaining the recent narrowing of spreads. These names continue to offer attractive yields. At a local debt level, emerging markets were less sensitive to variations in the interest rates of developed countries, although there were a few exceptions such as Chile and Colombia where inflation was higher than expected. We are particularly optimistic for Mexican local debt, and are anticipating further rate cuts from the country’s central bank. We are also upbeat when it comes to Brazilian debt as we think the market’s terminal rate is still too high. We still like Chinese bonds and are expecting more easing. In the current economic climate, our modified duration is close to 400 basis points, as it was the previous month, and we are protecting the portfolio with index hedges (CDS). We are still long on the yen too, as the Bank of Japan started its rate-hiking cycle in March and is battling to shore up its currency.

Performance Overview

Data as of:  11 Apr 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 14/04/2024

Carmignac Portfolio EM Debt Portfolio overview

Below is an overview of the composition of the portfolio.

Geographical Breakdown

Data as of:  28 Mar 2024.
Eastern Europe28.5 %
Latin America27.7 %
Africa22.8 %
Asia6.8 %
Europe5.6 %
Middle East4.4 %
Asia-Pacific3.7 %
North America2.6 %
Total % of bonds102.0 %
Eastern Europe28.5 %
huHungary
8.6 %
plPoland
6.9 %
Tchéquie
5.0 %
roRomania
3.2 %
uaUkraine
1.8 %
Kazakhstan
1.7 %
alAlbania
0.7 %
Arménie
0.6 %

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:  28 Mar 2024.
Modified Duration3.9
Yield to Worst6.8 %
Yield to Maturity6.9 %
Average Coupon5.4 %
Number of Issuers53
Number of Bonds77
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.