Carmignac Portfolio Grande Europe: Letter from the Fund Manager
![[Management Team] [Author] Denham Mark](https://carmignac.imgix.net/uploads/NextImage/0001/18/%5BManagement-Team%5D-Denham-Mark.png?auto=format%2Ccompress&fit=fill&w=3840)
During the second quarter of 2022, Carmignac Portfolio Grande Europe (A EUR Acc share class) declined -13.8%, providing a return below its reference indicator which fell -9.5%.
European Equity Market
Little has changed in the last three months: Q2 began in the same vein as Q1 ended, with markets juggling many concerns. On the one side, concerns about the impact of rising interest rates worldwide on stock price valuations and, on the other, concerns about disruption to companies and the economy from ongoing lockdowns in China and the war in Ukraine. The latter, which persistently fueled high energy and raw material prices, also placed additional burdens on companies and consumers. As the quarter developed, we saw a shift from valuation multiple compression due to rising rates, to growing fear over the impact of rising costs on economies and companies’ profits. Both dynamics had a detrimental effect on stock prices however, this transition, was the key factor affecting sectoral performance during the period. Cyclical/economically sensitive sectors such as Autos and Commodities – which had been more favourable in the previous quarter – dragged down the market and joined the already weak Construction, Industrials, and Technology names. Overall, the most resilient areas were all defensive including Telecommunications, Utilities, Consumer Staples, and Healthcare. The Energy sector was the exception, as it was sustained by the ongoing crisis with Russia.
Portfolio Management
By continuously assessing our portfolio, we see that this feared deterioration in company profits has yet to materialise among our companies, which have, by and large, delivered solid Q1 results and maintained full year targets. The exceptions were Vestas Wind Systems and GN Store Nord, names which have been the most affected by global supply chain disruptions over recent quarters and had to lower their 2022 expectations. For the wider market, analysts’ expectations for the year’s profit growth remain decent at low double digits. However, this looks optimistic as we expect declining economic growth to impact sales and persistent cost pressure to eventually eat into profit margins. Nevertheless, to date, our names have managed to pass cost pressure on through higher prices.
At this point, the question is: are future problems already discounted in the severe stock price decline seen in some of the most sensitive areas of the market? We suspect they are not. This view is supported by what happened to Kingspan’s stock price. Once the insulation material company announced that order volumes for their insulated panels used in commercial construction declined in May and June versus the same period last year, the stock fell more than 15% despite having already fallen ca 35% year to date. Investors are on the lookout for any news and ready to significantly penalise the negatives in an environment which has been detrimental to our Industrial stocks, namely Kingspan (insulation), Schneider (electricals), Sika (building materials), and Assa Abloy (locks). Still, we maintain these as core holdings as their investment thesis over the long-term holds up.
Although we have a large exposure to Health Care, it was not enough to offset the declines among our Industrial and Technology names in the period but, the underlying names have recorded good performance led by Novo Nordisk - our largest holding. Novo rose in Q2 driven by accelerating prescription growth of its key diabetes drug Ozempic as the so-called GLP-1 drug class continues to dominate and increase its share in treating the illness. Additionally, support came by the news that a manufacturing issue relating to a recently approved obesity product, Wegovy, is now resolved, and supply is set to resume in the second half of. This indication is a major part of our investment thesis as obesity is at least twice as prevalent as diabetes – according to the World Health Organization – and one where the use of successful drug treatments like Wegovy has only just started. Argenx, another name in the Health Care sector, was the best performer in the Fund over the period as the roll out of recently approved Vyvgart for the treatment of the rare disease Myasthenia Gravis exceeded analysts’ expectations. This result underpinned the company’s successful transition towards profitability and cash generation. We remain committed to both names.
Outlook
As active managers, we have used the dramatic pullbacks in stock prices seen in the previous months, to add new names to the Fund. With an investment horizon of more than five years, we have the confidence to bet against the market and seize opportunities. Earlier in the year we added biotech Genmab and dental implant firm Straumann. In Q2 we continued to increase Genmab in size and added Alcon, producer of eye care products ranging from surgically implanted artificial lenses to contact lenses. The name delivers the reliable steady growth we are looking for in this environment, driven by favourable trends of ageing demographics, better diagnosis, and innovation.
The Fund structure remains unchanged. The recent environment has been a difficult one for us, in absolute terms, and relative to our reference indicator. However, as fears over economic growth continue, we expect the sound nature and visibility of our more high-quality stocks to be supportive to the Fund’s performance. In any event, the portfolio is a consequence of our bottom-up stock picking process which focuses on profitable companies with high return on capital. Such companies, we believe, could deliver attractive long-term returns for investors.
Source: Company website, Bloomberg, Carmignac, June 2022
Carmignac Portfolio Grande Europe
Carmignac Portfolio Grande Europe A EUR Acc
- Aanbevolen minimale beleggingstermijn*
- 5 jaar
- Risicoschaal**
- 4/7
- SFDR-fondscategorieën***
- Artikel 9
*Aanbevolen minimale beleggingstermijn: Dit deelnemingsrecht/deze klasse is mogelijk niet geschikt voor beleggers die voornemens zijn hun inleg voor afloop van de aanbevolen termijn op te nemen. Deze verwijzing naar een beleggersprofiel is geen beleggingsadvies. Welk bedrag redelijkerwijs in een ICBE kan worden belegd hangt af van uw persoonlijke situatie en moet worden bekeken in relatie tot uw totale portefeuille. **Het profiel kan variëren van 1 tot 7, waarbij categorie 1 overeenkomt met een lager risico en een lager potentieel rendement, en categorie 7 met een hoger risico en een hoger potentieel rendement. De categorieën 4, 5, 6 en 7 impliceren een hoge tot zeer hoge volatiliteit, met grote tot zeer grote prijsschommelingen die op korte termijn tot latente verliezen kunnen leiden. ***De Sustainable Finance Disclosure Regulation (SFDR) 2019/2088. De SFDR-classificatie van de fondsen kan in de loop van de tijd veranderen.
Voornaamste risico's van het Fonds
Rendement
| Carmignac Portfolio Grande Europe | +8,5 | −0,9 | +11,3 | +14,8 | −21,1 | +21,7 | +14,5 | +34,8 | −9,6 | +10,4 |
| Referentie-indicator | +12,0 | +19,4 | +8,8 | +15,8 | −10,6 | +24,9 | −2,0 | +26,8 | −10,8 | +10,6 |
| Carmignac Portfolio Grande Europe | +10,1 % | +1,9 % | +7,9 % |
| Referentie-indicator | +17,2 % | +9,1 % | +9,4 % |
Bron: Carmignac op 30 okt. 2026.
Het beheer van dit deelnemingsrecht/deze klasse is niet gebaseerd op de indicator. In het verleden behaalde resultaten en waarden bieden geen garantie voor toekomstige resultaten en waarden. De vermelde rendementen zijn netto na aftrek van alle kosten, met uitzondering van eventuele in- en uitstapkosten, en worden verkregen na aftrek van kosten en belastingen die van toepassing zijn op een gemiddelde detailhandelsklant die als natuurlijke persoon woonachtig is in België. Wanneer de valuta afwijkt van uw eigen valuta, bestaat er een valutarisico dat kan resulteren in een waardedaling. De referentievaluta van het fonds/subfonds is de EUR. Het fonds houdt een risico op kapitaalverlies in.
Het rendement kan stijgen of dalen als gevolg van valutaschommelingen voor de aandelen die niet valutadekkend zijn.
Referentie-indicator: MSCI Europe NR index