Calendar Year Performance 2014Calendar Year Performance 2015Calendar Year Performance 2016Calendar Year Performance 2017Calendar Year Performance 2018Calendar Year Performance 2019Calendar Year Performance 2020Calendar Year Performance 2021Calendar Year Performance 2022Calendar Year Performance 2023
+ 1.7 %
- 0.6 %
+ 0.1 %
+ 1.8 %
- 3.4 %
+ 5.0 %
+ 9.2 %
-
- 8.0 %
+ 4.7 %
Net Asset Value
1043.7 €
Asset Under Management
1 490 M $
Market
Global market
SFDR - Fund Classification
Article
8
Data as of: 30 Apr 2024.
Data as of: 15 May 2024.
Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor).
Investors lowered their expectations of key rate cuts at the Federal Reserve this year, pushing up yields such as the US 2yr, which gained 34 bps over the month to pass the 5% mark. This readjustment happened gradually over April as inflation figures were particularly solid across the Atlantic. The consumer price index in particular surged to +3.5% y/y. The roots of inflation are keeping Fed members on their guard as retail sales and employment data point towards a no-landing scenario for the US economy. Desynchronisation continues with the planets aligning in the Eurozone where inflation eased further to +2.4% y/y, allowing the ECB to take a much more dovish tone. The economic recovery is more visible in leading indicators as well as growth figures, which are beating the consensus forecast. However, this uncoupling has not helped European yields, which have followed the same upward trajectory as their US equivalents. The 10-year Bund yield gained 29 bps in April. The geopolitical situation has deteriorated in the Middle East after Iran’s bombardment of Israel, fuelling risk aversion among investors as well as inflation, with commodity prices surging.
Performance commentary
Our Fund fared much better than its reference indicator over April, in hostile conditions for government and corporate bond markets. This lead resulted from the resilience of our performance drivers and the Fund’s low modified duration. Our buy-and-hold strategies keep adding to the portfolio’s returns, while our inflation-linked instruments are benefitting from the global economy’s more upward trajectory and the deterioration of the geopolitical situation. We scaled back our credit hedging in April after spreads widened. We also increased exposure to US short-term yields and emerging market debt through positions in Mexico and Brazil.
Outlook strategy
The main developed economies’ robustness is paradoxically good but also slightly worrying news for the markets, as it results solely from countries’ new budget deficit paradigm. The increase in borrowing has created imbalances that are starting to weigh on bonds, as fiscal policy contradicts the monetary policy goals of the main central banks. This no-landing scenario for the economy also rules out any prospect of inflation returning to target, as economic data continues to amaze investors. On top of this, commodity prices – which had been the main factors behind disinflation – have surged, and will probably now weigh on producer and consumer price indices. This economic outlook suggests we should be keeping the portfolio’s modified duration low, with a preference for the short end of yield curves. We are remaining short on the long end, for which abundant supply is likely to meet lower demand at a time when central banks are reducing the size of their balance sheets. We are also short on Japanese government bonds as the BoJ started its rate-hiking cycle in March, and is battling to shore up its currency. On corporate bond markets, we are keeping high gross exposure to sub-segments that offer good carry, such as subordinated financial debt and structured credit, while consolidating our net exposure through cheap hedging to cushion any exogenous shocks on credit markets. The weighting of our inflation-linked strategies is still high, as these should benefit from raised inflation expectations and provide good cover from any increase in geopolitical risk.
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.
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Market environment
Investors lowered their expectations of key rate cuts at the Federal Reserve this year, pushing up yields such as the US 2yr, which gained 34 bps over the month to pass the 5% mark. This readjustment happened gradually over April as inflation figures were particularly solid across the Atlantic. The consumer price index in particular surged to +3.5% y/y. The roots of inflation are keeping Fed members on their guard as retail sales and employment data point towards a no-landing scenario for the US economy. Desynchronisation continues with the planets aligning in the Eurozone where inflation eased further to +2.4% y/y, allowing the ECB to take a much more dovish tone. The economic recovery is more visible in leading indicators as well as growth figures, which are beating the consensus forecast. However, this uncoupling has not helped European yields, which have followed the same upward trajectory as their US equivalents. The 10-year Bund yield gained 29 bps in April. The geopolitical situation has deteriorated in the Middle East after Iran’s bombardment of Israel, fuelling risk aversion among investors as well as inflation, with commodity prices surging.