Carmignac Portfolio Emergents: Letter from the Fund Managers - Q2 2025
Over the second quarter, Carmignac Portfolio Emergents F EUR Acc recorded a positive performance of +5.8%, compared to +3.1% for its reference indicator1. Yet, the quarter began under challenging conditions, marked by President Trump’s announcement of particularly high tariffs on imports, notably those from China. Despite this context, emerging markets not only posted positive returns but also outperformed both developed and U.S. markets. This outperformance can be attributed to investors' realization that Trump's isolationist policy was likely to be more detrimental to the United States than to its trading partners.
Furthermore, China demonstrated its negotiation leverage by using its control over rare metal refining, thereby enforcing a trade truce with the United States and obtaining a relaxation of the restrictions on the export of Nvidia’s high-performance chips.
Latin America
The fund’s strong performance over the quarter was largely driven by Latin America.
Our main positions in the region, which form the core of our LatAm portfolio — such as Banorte and Mercado Libre — significantly outperformed. Mexico has benefited from the protection provided by the USMCA free trade agreement with the United States and Canada, positioning it as a likely winner in the current economic and geopolitical environment. Moreover, Claudia Sheinbaum, despite having a temperament and political stance very different from Trump’s, opted to avoid confrontation by reinforcing border controls. This approach allowed Trump to claim a symbolic victory on the issue of migration.
Taiwan & South Korea
Among other positive contributors to the fund’s performance, our holdings in companies linked to artificial intelligence — such as TSMC, Hynix, and Elite Material — also deserve mention.
This theme plays a central role in our investment process, and Asia is home to many key players in the field. This is why we increased our position in Hynix at the beginning of the quarter. Hynix’s HBM (High Bandwidth Memory) chips, used by Nvidia for AI applications, have disrupted the market to its advantage, while Samsung’s competing products have yet to receive Nvidia certification. As of June 30, Hynix represented 5.4% of the fund.
Hynix also benefited from the sharp rally in the South Korean market following the election of Lee Jae-Myung as president on June 3. Upon taking office, President Lee announced plans to encourage large Korean conglomerates, or chaebols, to improve corporate governance — a move that sparked strong enthusiasm in the markets. We took this opportunity to exit our position in Samsung, whose foundry investments have not managed to close the gap with TSMC, the clear market leader with a near-monopoly in the segment. The disappointing returns of Samsung’s foundry division and its loss of leadership in the memory market make the company less attractive to us than in the past.
India & Southeast Asia
During the quarter, we did not make any changes to our Indian portfolio (18.8% of the fund), but we increased our exposure to Southeast Asia. We initiated a position in the Indonesian private bank Bank Central Asia, which fully meets the criteria of our investment process.
The first criterion relates to the underpenetration of the banking sector in Indonesia: with a bank credit-to-GDP ratio of just 31%3, the level remains exceptionally low — not only compared to developed markets but also relative to other emerging economies. Among major emerging markets, only Argentina has a lower penetration rate, largely due to the repeated economic crises it has experienced.
Indonesia, by contrast, enjoys steady growth of around 5%, a low sovereign debt level (39% of GDP), moderate inflation near 2%, and a solid balance of payments4. These factors provide a supportive environment for stable and sustainable growth in the years — if not decades — ahead.
In addition, Bank Central Asia stands out as the only major privately-owned bank in the country, with all other large institutions being state-owned. This setup is reminiscent of India, where private banks have gradually gained market share from public sector banks thanks to greater operational efficiency. Bank Central Asia has a robust financial structure, with a Tier 1 ratio of 27%, a low non-performing loan ratio of 2%, and a return on equity exceeding 20%5. Following a more than 25% underperformance over the past year6, the stock’s valuation appeared attractive to us, with its P/E ratio falling below its long-term average. This led us to initiate a position in the stock.
The arrival of Naomi Waistell
This quarter was also marked by the strengthening of the investment team, with the appointment of Naomi Waistell as co-portfolio manager of Carmignac Emergents.
With nearly 16 years of experience in emerging markets management, Naomi fully embraces the fund’s investment philosophy, focusing on high-quality companies with strong growth prospects and resilient business models capable of generating sufficient free cash flow to sustain performance, even during economic slowdowns.
We are confident that our investment process, which serves as our compass, will continue to guide us in delivering strong performance over the coming years, particularly as a new bull market appears to be taking shape in an asset class that many investors had long overlooked in favor of U.S. markets.
The recent weakness of the dollar and the US bond market is paving the way for a reallocation towards emerging markets, which remain significantly underweight in asset allocators' portfolios. This is all the more true given that the average 2026 price earnings (P/E) ratio for emerging countries is 11.1x, compared with 18.4x for developed markets. According to a recent JP Morgan study, if emerging markets simply reached a weighting equivalent to that of the MSCI AC World benchmark, this would result in an estimated $1.5 trillion flowing into emerging market equities7.
Positioning as of 30/06/2025
Carmignac Portfolio Emergents
Carmignac Portfolio Emergents F EUR Acc
- Periodo minimo di investimento consigliato
- 5 anni
- Livello di rischio*
- 4/7
- Classificazione SFDR**
- Articolo 9
*Scala di Rischio del KID (documento contenente le informazioni chiave). Il rischio 1 non significa che l'investimento sia privo di rischio. Questo indicatore può evolvere nel tempo. **Regolamento SFDR (Regolamento relativo all’informativa sulla sostenibilità nel settore dei servizi finanziari) 2019/2088. La classificazione SFDR dei Fondi può evolvere nel tempo.
Principali rischi del Fondo
Costi
- Costi di ingresso
- Non addebitiamo una commissione di ingresso.
- Costi di uscita
- Non addebitiamo una commissione di uscita per questo prodotto.
- Commissioni di gestione e altri costi amministrativi o di esercizio
- 1.15% del valore dell'investimento all'anno. Si tratta di una stima basata sui costi effettivi dell'ultimo anno.
- Commissioni di performance
- 20.00% quando la classe di azioni supera l'Indicatore di riferimento durante il periodo di performance. Sarà pagabile anche nel caso in cui la classe di azioni abbia sovraperformato l'indice di riferimento ma abbia avuto una performance negativa. La sottoperformance viene recuperata per 5 anni. L'importo effettivo varierà a seconda del rendimento del tuo investimento. La stima dei costi aggregati di cui sopra include la media degli ultimi 5 anni o dalla creazione del prodotto se inferiore a 5 anni.
- Costi di transazione
- 0.39% del valore dell'investimento all'anno. Si tratta di una stima dei costi sostenuti per l'acquisto e la vendita degli investimenti sottostanti per il prodotto. L'importo effettivo varierà a seconda dell'importo che viene acquistato e venduto.
Performance
| Carmignac Portfolio Emergents | +5.5 | +5.5 | +9.8 | −14.3 | −10.3 | +44.9 | +25.5 | −18.2 | +19.8 | +1.7 |
| Indice di riferimento | +1.7 | +14.7 | +6.1 | −14.9 | +4.9 | +8.5 | +20.6 | −10.3 | +20.6 | +14.5 |
| Carmignac Portfolio Emergents | +6.8% | +5.6% | +4.5% |
| Indice di riferimento | +5.5% | +5.9% | +4.3% |
Fonte: Carmignac al 30 giu 2025.
Le performance passate non sono un'indicazione delle performance future. Le performance sono calcolate al netto delle spese (escluse eventuali commissioni di ingresso applicate dal distributore). L'investimento nel Fondo potrebbe comportare un rischio di perdita di capitale.
Il rendimento può aumentare o diminuire a causa delle fluttuazioni valutarie, per le azioni non coperte da copertura valutaria.
Indice di riferimento: MSCI EM NR index