Carmignac Portfolio Patrimoine Europe: Letter from the Fund Managers
(A EUR Share class)
(A EUR Share class)
(A EUR Share class)
Carmignac Portfolio Patrimoine Europe A EUR Acc gained +0.93% in the second quarter of 2023,
underperforming the +1.13% rise of its reference indicator1.
European Markets Review
While the United States growth continues to surprise investors positively, Europe appears to be in a more delicate situation, as shown by the economic releases during the quarter. Despite a decrease in headline inflation which benefited from a slowdown in commodity prices, core inflation in Europe remains at elevated levels (5.4% in June2). This has led the European Central Bank (ECB) to maintain a restrictive monetary policy, raising its interest rates twice during the quarter, bringing the main refinancing rate to 4.0%. Meanwhile, growth data showed that the eurozone experienced a mild recession over the winter, with GDP declines of -0.1% in both Q4 2022 and Q1 20232. Forward-looking data also points to slowing momentum in the eurozone economy and could influence future ECB decisions.
In this context, European equities posted modest gains in the second quarter of 2023, driven by the financial and technology sectors, while energy and communication services underperformed. The technology sector received a boost from semiconductor stocks, as higher-than-expected sales projections from some US chipmakers showcased the growth potential stemming from artificial intelligence. On rates, European bond yields were up in Q2 and, owing to the more marked downturn in the eurozone’s macroeconomic outlook, outperformed their US counterparts considerably.
Quarterly performance review
In the second quarter, the Fund’s positioning reflected a less optimistic economic outlook, with limited exposure to equities (20% on average) and positive modified duration. Although this scenario is slowly unfolding in Europe, market participants seemed to be more focused on the resilience of US growth. As a result, our long position on core government rates weighed on performance and was the fund's main detractor. Conversely, our under-exposure in equities was offset by a favorable sector mix. Indeed, our convictions in the healthcare sector with investments in Alcon and Zealand Pharma, as well as in technology with SAP, have paid off during the quarter. Likewise, our credit book demonstrated positive performance over the past three months, primarily driven by the performance of our CLOs exposure.
Outlook
On the macro-economic front, the ECB’s policy tightening over the past year is starting to affect lending conditions as well as the real economy. GDP growth will probably remain sluggish and core inflation should start declining sharply in the autumn, paving the way for the ECB to close the door on its rate hikes by year-end. Given this economic environment, our portfolio is positioned for an economic slowdown in Europe, with a cautious approach to risky assets and long duration positions.
Within risky assets, we have the flexibility to favor credit over equities, which may not fully account for a potential economic slowdown. Currently, we find attractive opportunities in credit investments, particularly those that factor in a higher likelihood of recession (as indicated by the iTraxx Crossover index, implying an annual default rate of nearly 7% in Europe compared to the historical average of around 2%). These credit investments offer yields close to their 10-year highs, providing a buffer in case credit spreads widen. On equities, we remain cautiously exposed as the markets are currently trading at near-record levels. However, we continue to favor high-quality, sustainable businesses in our stock selection, as they appear well-positioned in the current environment. The superior profit growth, visibility of sales and the defensive characteristics (especially in healthcare) should help them weather an economic slowdown.
As for government bonds, central banks' reliance on economic data requires preparation for different scenarios. If there is a confirmed economic slowdown and rapid disinflation, we anticipate a broad decline in interest rates. Conversely, a resilient economy may lead to further policy rate hikes but could impact long-term bond yields and increase the likelihood of future economic contraction. To navigate this environment, we maintain a positive exposure to government bonds to take advantage of the carry and are willing to tactically adjust the modified duration if needed.
1Reference Indicator: 40% STOXX Europe 600 (Reinvested Net Dividends) + 40% ICE BofA All Maturity All Euro Government + 20% ESTER capitalized. Quarterly Rebalanced. Until 31/12/2021, the reference indicator was 50% STOXX Europe 600, 50% BofA Merrill Lynch All Maturity All Euro Government Index. The performances are presented using the chaining method.
2Source: Bloomberg, 30/06/2023.
Source: Carmignac, Bloomberg, data as of 30/06/2023. Performance of the A EUR Acc share class ISIN code: LU1744628287. Risk Scale from the KID (Key Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time.
Carmignac Portfolio Patrimoine Europe A EUR Acc
- Aanbevolen minimale beleggingstermijn*
- 3 jaar
- Risicoschaal**
- 3/7
- SFDR-fondscategorieën***
- Artikel 8
*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 Patrimoine Europe | +3,8 | +4,9 | +7,3 | +2,1 | −12,7 | +9,5 | +13,9 | +18,7 | −4,8 |
| Referentie-indicator | +4,3 | +8,3 | +5,1 | +9,5 | −11,0 | +10,2 | +2,4 | +16,4 | −4,8 |
| Carmignac Portfolio Patrimoine Europe | +6,9 % | +0,9 % | +4,4 % |
| Referentie-indicator | +8,2 % | +3,3 % | +4,3 % |
Bron: Carmignac op 30 okt. 2026.
Datum van de eerste NAV : 29/12/2017.
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: 40% MSCI Europe NR index + 40% ICE BofA All Maturity All Euro Government index + 20% €STR Capitalized Index. Frequentie van herweging: Driemaandelijks