In this “lower rate for longer” environment, find out the positioning of our funds:
On March 10th, 2021, four of our Fixed Income Funds have changed their name. The word “unconstrained” has been removed and Carmignac Portfolio Unconstrained Euro Fixed Income has been renamed Carmignac Portfolio Flexible Bond.
We maintain a relatively high modified duration close to 3. The Fund’s average rating is BBB and average YTM is 1.14%. The portfolio has a tilt toward Credit and a short-dated exposure to non-core sovereign debt.
Sovereign component (24% of the fund's total assets)
Corporate component (63%)
Cash component (13%)
Our main convictions:
Mainly through exposure to the HY segment (15%) and financial subordinates (12%). We have just reinforced our exposure to HY credit after:
We also maintain our Covid-names convictions (both IG and HY ratings) which still offer an attractive carry and potential for appreciation in the medium term.
We keep our strong exposure to Italian sovereign debt (should largely benefit from ECB support/ No more short-term political risk/ Attractive carry level).
Positive duration on core countries (mainly on the EUR and US yield curves but also, more modestly, on AUD and GBP yield curves) to take advantage of monetary support around the world and protect the portfolio in the case of macroeconomic deterioration resulting in flight to quality movements.
Optional strategies on the US yield curve to flexibly adjust our interest rate risk exposure.
High modified duration at 6.5 and a net exposure to the Fixed Income markets at 86%.
Higher overall modified duration which stands close to 8.3 and limited currency risk. The Fund’s average YTM stands at 3.35% now with a BBB+ average rating 1 .
Currency component: Cautious positioning favoring the Euro and a light short exposure to the USD, as the US Covid-19 wave in the Midwest and the uncertainties could generate some volatility on the greenback. We are also maintaining a net short position on the CAD due to weak macroeconomic fundamentals and the lack of carry while we are maintaining a long position on both the CNH & AUD as both currencies are linked to Chinese growth. Fund’s main FX exposure: EUR 103% / USD -10% / AUD 8% / CAD -8% / IDR 5% / CNH 3% / Others -1%.
Rates component:
o Reinforced long duration strategy with a diversified exposure to core rates between the US & Australia.
o Decent allocation to EM external debt (Russia, Romania, Morocco) and Chinese local rates.
Main risks of the Fund
INTEREST RATE: Interest rate risk results in a decline in the net asset value in the event of changes in interest rates. CREDIT: Credit risk is the risk that the issuer may default. RISK OF CAPITAL LOSS: The portfolio does not guarantee or protect the capital invested. Capital loss occurs when a unit is sold at a lower price than that paid at the time of purchase. CURRENCY: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments. The Fund presents a risk of loss of capital.
* Risk Scale from the KIID (Key Investor Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time. A EUR Acc share class ISIN code: FR0010149120.
Main risks of the Fund
INTEREST RATE: Interest rate risk results in a decline in the net asset value in the event of changes in interest rates. CREDIT: Credit risk is the risk that the issuer may default. RISK OF CAPITAL LOSS: The portfolio does not guarantee or protect the capital invested. Capital loss occurs when a unit is sold at a lower price than that paid at the time of purchase. CURRENCY: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments. The Fund presents a risk of loss of capital.
* Risk Scale from the KIID (Key Investor Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time. F EUR Acc share class ISIN code: LU0992624949.
Main risks of the Fund
INTEREST RATE: Interest rate risk results in a decline in the net asset value in the event of changes in interest rates. CREDIT: Credit risk is the risk that the issuer may default. Risk of capital loss: The portfolio does not guarantee or protect the capital invested. Capital loss occurs when a unit is sold at a lower price than that paid at the time of purchase. Currency: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments. The Fund presents a risk of loss of capital.
* Risk Scale from the KIID (Key Investor Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time.A EUR Acc share class ISIN code: LU0336084032.
Main risks of the Fund
CREDIT: Credit risk is the risk that the issuer may default. INTEREST RATE: Interest rate risk results in a decline in the net asset value in the event of changes in interest rates. Currency: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments. Discretionary management: Anticipations of financial market changes made by the Management Company have a direct effect on the Fund's performance, which depends on the assets selected. The Fund presents a risk of loss of capital.
* Risk Scale from the KIID (Key Investor Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time. A EUR Acc share class ISIN code: LU1623762843.
Main risks of the Fund
INTEREST RATE: Interest rate risk results in a decline in the net asset value in the event of changes in interest rates. CREDIT: Credit risk is the risk that the issuer may default. CURRENCY: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments. DISCRETIONARY MANAGEMENT: Anticipations of financial market changes made by the Management Company have a direct effect on the Fund's performance, which depends on the assets selected. The Fund presents a risk of loss of capital.A EUR Acc share class.
* Risk Scale from the KIID (Key Investor Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time. A EUR Acc share class ISIN code: LU0336083497.
This document is intended for professional clients. This is an advertising document. This document may not be reproduced, in whole or in part, without prior authorisation from the management company. This document does not constitute a subscription offer, nor does it constitute investment advice. Carmignac Portfolio refers to the sub-funds of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive. The Funds are common funds in contractual form (FCP) conforming to the UCITS Directive under French law.The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged. 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. Access to the Fund may be subject to restrictions with regard to certain persons or countries. The Fund is not registered in North America, in South America, in Asia nor is it registered in Japan. The Funds are registered in Singapore as restricted foreign scheme (for professional clients only). The Fund has not been registered under the US Securities Act of 1933. The Fund may not be offered or sold, directly or indirectly, for the benefit or on behalf of a "U.S. person", according to the definition of the US Regulation S and/or FATCA. The Fund presents a risk of loss of capital. The risks and fees are described in the KIID (Key Investor Information Document). The Fund's prospectus, KIIDs and annual reports are available at www.carmignac.com, or upon request to the Management Company. The KIID must be made available to the subscriber prior to subscription.