Carmignac P. Credit : Letter from the Fund Managers

  • +2.81%
    Carmignac P. Credit’s performance

    in the 4th quarter of 2022 for the A EUR Share class

  • +2.16%
    Reference indicator’s performance

    in the 4th quarter of 2022 for the 75% ICE BofA Euro Corporate Index et 25% ICE BofA Euro High Yield Index

  • +0.65%
    Outperformance of the Fund

    on the quarter versus the reference indicator

Carmignac Portfolio Credit A share in EUR was down 13.01% in 2022, vs. a 13.31% decline in its reference indicator¹. In the fourth quarter, the EUR A share gained 2.81%, 65bp more than its reference indicator1.

Quick overview on 2022

2022 was a terrible year for credit markets globally. No corners of the credit world were spared, with double-digit declines the norm across sub-asset classes. We were disappointed by our deeply negative absolute return and are determined to recover the lost ground for our clients going forward – more on that below. We make plenty of mistakes every year; we are fully aware that we made too many in 2022, resulting in significantly lower outperformance than in previous years. That said, given the unprecedented circumstances and the long bias (with no currency exposure) embedded in our fund’s mandate, we think our investment process has fared decently, and it has been strengthened by the lessons learned from our mistakes.

Performance review

Barring Russia, we saw more improved situations than default incidents among the companies in our portfolio. The financial health of a significant number of issuers whose bonds we own picked up as a result of inflation (especially in the commodities and finance sectors). Our hedges played their role and contributed positively to our full-year return (one could argue that we should’ve hedged more but we were at the upper limit of our hedging capacity for a good part of the year). As discussed in previous quarterly reports, we misjudged how the war in Ukraine would play out, and have learned our lesson in terms of better controlling for country risk in the future. Most Russian issuers are still meeting their debt service obligations and the value of our investments there recovered in the second half. For bonds that were trading close to a conservative assessment of their fundamental value and for which there was enough market liquidity to sell, we took advantage of the opportunity to dispose of our holdings. We will continue to do so going forward.

What is our outlook for the coming months?

We are excited about the performance prospects for our portfolio as we head into 2023. It currently has an adjusted yield of more than 9% along with an average BB+ rating (but beyond ratings, we believe our portfolio is made up of companies with robust fundamentals whose risks are very well remunerated). This level of carry is historically high and tilts the range of potential outcomes very much in favour of investors in our fund. Even if credit markets experience another once-in-50-year bear market for the second year in a row, our portfolio’s yield means we could withstand at least 200bp of further widening before our returns slide into negative territory. Such additional widening, whether it occurs in rates or spreads, would likely be devastating for many other asset classes (including private-market investments, which mostly didn’t reprice in line with the fundamentals in 2022 and which could be due for a catchup if the environment deteriorates further). In such a scenario, we believe our hedges and our bond-picking would allow us to outperform, as we have in every calendar year since the fund was launched. Conversely, if spreads tighten across the credit space, it’d be hard not to imagine us delivering solid double-digit returns owing to both the resulting capital appreciation and the fixed income. Attractive opportunities are to be found by staying rational when markets are driven by fear, and rarely in our careers have we seen such a good window of opportunity.

In addition to today’s favourable market climate, we’re excited about what looks like the end of more than 10 years of financial repression. Now that the major central banks are injecting less liquidity, rates and spreads should settle in at structurally higher levels. A more substantial cost of capital will cause average default rates to return to normal – and bring back meaningful alpha generation opportunities in restructuring situations along with generous risk premia. In all, we believe Carmignac Portfolio Credit has the wind in its sails and offers much greater potential for delivering solid returns and outperforming in the years to come than ever before.

Sources: Carmignac, Bloomberg, 31/12/2022

Carmignac Portfolio Credit

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Carmignac Portfolio Credit A EUR Acc

ISIN: LU1623762843

Empfohlene Mindestanlagedauer

Geringstes Risiko Höchstes Risiko

1 2 3 4 5 6 7
Hauptrisiken des Fonds

KREDITRISIKO: Das Kreditrisiko besteht in der Gefahr, dass der Emittent seinen Verpflichtungen nicht nachkommt.

ZINSRISIKO: Das Zinsrisiko führt bei einer Veränderung der Zinssätze zu einem Rückgang des Nettoinventarwerts.

KAPITALVERLUSTRISIKO: Das Portfolio besitzt weder eine Garantie noch einen Schutz des investierten Kapitals. Der Kapitalverlust tritt ein, wenn ein Anteil zu einem Preis verkauft wird, der unter seinem Kaufpreis liegt.

WÄHRUNGSRISIKO: Das Währungsrisiko ist mit dem Engagement in einer Währung verbunden, die nicht die Bewertungswährung des Fonds ist.

Der Fonds ist mit einem Kapitalverlustrisiko verbunden.

Carmignac Portfolio Credit A EUR Acc

ISIN: LU1623762843
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (YTD)
Year to date
Carmignac Portfolio Credit A EUR Acc - - - +1.79 % +1.69 % +20.93 % +10.39 % +2.96 % -13.01 % +10.58 % +4.06 %
Referenzindikator - - - +1.13 % -1.74 % +7.50 % +2.80 % +0.06 % -13.31 % +9.00 % +0.50 %

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3 Jahre 5 Jahre 10 Jahre
Carmignac Portfolio Credit A EUR Acc +0.26 % +3.86 % -
Referenzindikator -1.67 % +0.17 % -

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Quelle: Carmignac am 31/05/2024

Einstiegskosten : 2,00% des Betrags, den Sie beim Einstieg in diese Anlage zahlen. Dies ist der Höchstbetrag, der Ihnen berechnet wird. Carmignac Gestion erhebt keine Eintrittsgebühr. Die Person, die Ihnen das Produkt verkauft, teilt Ihnen die tatsächliche Gebühr mit.
Ausstiegskosten : Wir berechnen keine Ausstiegsgebühr für dieses Produkt.
Verwaltungsgebühren und sonstige Verwaltungs- oder Betriebskosten : 1,20% des Werts Ihrer Anlage pro Jahr. Hierbei handelt es sich um eine Schätzung auf der Grundlage der tatsächlichen Kosten des letzten Jahres.
Erfolgsgebühren : 20,00% wenn die Anteilsklasse während des Performancezeitraums den Referenzindikator übertrifft. Sie ist auch dann zahlbar, wenn die Anteilsklasse den Referenzindikator übertroffen, aber eine negative Performance verzeichnet hat. Minderleistung wird für 5 Jahre zurückgefordert. Der tatsächliche Betrag hängt davon ab, wie gut sich Ihre Investition entwickelt. Die obige aggregierte Kostenschätzung enthält den Durchschnitt der letzten 5 Jahre oder seit der Produkterstellung, wenn es weniger als 5 Jahre sind.
Transaktionskosten : 0,43% des Werts Ihrer Anlage pro Jahr. Hierbei handelt es sich um eine Schätzung der Kosten, die anfallen, wenn wir die Basiswerte für das Produkt kaufen oder verkaufen. Der tatsächliche Betrag hängt davon ab, wie viel wir kaufen und verkaufen.
Vielen Dank für Ihre Rückmeldung!