Carmignac Portfolio Investissement: Letter from the Fund Manager - Q4 2025

During the fourth quarter of 2025, Carmignac P. Investissement delivered a robust return of +5.88%, outperforming its reference indicator, which posted a gain of +3.34%. In 2025, the Fund achieved a positive performance of +17.56%, compared to +7.86% for its reference indicator.

In 2025, equity markets delivered solid overall gains despite a volatile start to the year. The early months were marked by uncertainty surrounding Chinese competition in artificial intelligence (AI), trade tensions, and the timing of interest-rate cuts, triggering episodes of sharp but short-lived sell-offs. From the April lows, markets rebounded strongly through year-end, supported by resilient global growth, fiscal stimulus announcements across several regions, and interest-rate cuts by major central banks, all of which boosted valuations and risk appetite.

U.S. markets remained buoyant throughout the year, underpinned by continued enthusiasm around AI. This momentum was sustained by significant investments from hyperscalers, robust corporate earnings, and a surge in deals and partnerships across the infrastructure and cloud computing sectors.

European and Emerging Markets outperformed U.S. equities. In Europe, declining inflation, improving macroeconomic conditions, and the announcement of a German fiscal stimulus package supported equity performance. Emerging Markets benefited from a weakening U.S. dollar and renewed investor interest. Notably, Taiwan and South Korea posted strong gains, driven by their exposure to the semiconductor sector and, in South Korea’s case, post-election optimism.

Geopolitical uncertainty fueled a strong rally in precious metals.

The Fund outperformed its reference indicator over the fourth quarter of 2025, driven by strong stock selection in the technology sector (SK Hynix, Alphabet, TSMC and Elite Material) as well as in healthcare (Lantheus and Thermo Fisher).

The final quarter was a good illustration of the overall year, during which the Fund delivered a high double-digit return and significantly outperformed its reference indicator. In 2025, performance was driven primarily by technology holdings, where strong stock selection and exposure to emerging market leaders such as SK Hynix, TSMC, Nvidia and Elite Material generated substantial value. This was supported by active additions during the market weakness in April and profit-taking later in the year.

Alphabet was one of our best contributors of the year. While most investor attention focused on the Magnificent Seven’s AI-driven gains, Alphabet remained relatively overlooked—despite being a leading AI innovator. With Gemini, its generative AI platform, Alphabet is a credible challenger to OpenAI and Microsoft. Beyond software, Alphabet is also strengthening its position in AI infrastructure through its in-house TPUs, offering a cost-efficient alternative to Nvidia’s dominant GPUs and attracting interest from major players such as Meta. This combination of innovation and strategic execution enabled Alphabet to post the strongest performance among the Magnificent Seven in 2025. We increased our exposure early in the year and benefited from the subsequent re-rating of the stock.

Industrials also contributed positively, with names such as Comfort Systems, Prysmian, Safran and General Electric delivering solid returns, while disciplined exits allowed gains to be crystallised as valuations became stretched. In addition, equity hedges through put options provided protection and a positive contribution during the April market stress.

These strengths were marginally offset by limited weaknesses in healthcare, notably Centene and Novo Nordisk, as well as a small number handful of stock-specific detractors including Block, Amazon and Tradeweb.

Looking ahead, we expect market dispersion to increase further, both within the technology sector and relative to the broader equity market, as faster and increasingly reversible investor arbitrage amplifies volatility. In this environment, performance will depend on being positioned on the right side of disruption, including cases of internal disruption within the technology complex, particularly in hardware. We are therefore becoming more selective in our AI hardware exposure, focusing on high-quality companies that benefit from the ongoing capex cycle without facing excessive pressure on free cash flow or profitability from overly aggressive investment plans. We also prioritise companies that are relatively immune to internal technological disruption while still offering valuations that remain reasonable relative to their growth prospects. Within this framework, SK Hynix and TSMC continue to stand out as attractive long-term opportunities.

At the same time, we are building exposure to companies that are, in our view, wrongly perceived as AI casualties, particularly within software and financial infrastructure. While AI implementation is advancing rapidly in specific areas such as coding, we believe that, for most enterprises, AI will be deployed on top of existing software stacks and that adoption will remain gradual rather than disruptive in the near term. This underpins our increased exposure to established software platforms such as Salesforce, ServiceNow, GitLab and Atlassian, a positioning that remains contrarian relative to prevailing market sentiment.

Within healthcare, our focus remains on self-funded companies with existing commercial products and robust pipelines of new therapies. We have reinforced our exposure to biotechnology, as well as to Novo Nordisk, which we believe is well positioned to benefit from the launch of the first oral GLP-1 medicine for obesity. We also added to Doximity, a leading digital platform for US healthcare professionals, used by over 80% of doctors. It supports communication, telemedicine and clinical information sharing, with a highly scalable business model delivering profit margins above 40%.

Alongside these positions, we see continued potential in contrarian opportunities such as Block, which offers mispriced exposure to secular growth in digital payments and an approaching inflection point in its profitability profile.