Carmignac Portfolio Emerging Discovery - Letter from the Portfolio Managers

Carmignac Portfolio Emerging Discovery (A EUR ACC share class, ISIN LU03360838101) was up +3.91% during the third quarter versus -1,20% for its reference indicator2, making up for around half of the under-performance accumulated by the fund since the beginning of the year, which, as a reminder, was largely due to its Russian exposure. Since the beginning of the year, the fund retuned -18.29% versus -12.65% for its composite reference indicator.

Performance explanation

The past quarter’s strong performance was mainly due to India. Two things played in our favor. Firstly, the fund had a significant overweight position in India, with an average exposure of 24% over the quarter to be compared with 18% for its reference indicator. And secondly, we were rewarded by our stock picking. Our Indian portfolio was up 31.9% over the quarter vs 17.6% for our reference indicator1 .

More specifically, our consumer names Sapphire Foods and Varun Beverages were the top two contributors to the fund during the quarter. While most Asian countries are seeing their economic activity collapse as a consequence of weakening exports, India, on the other hand, is experiencing an uptick in domestic credit and investments. This is supporting domestic demand and consumption. Our Indian healthcare names also performed very well, especially Max Healthcare which was added to the fund during the summer. We bought a very large position in August when the company raised Equity.

Max Healthcare is the second largest hospital chain in India, with 17 facilities and a current capacity of 3,400 beds which is rising rapidly. The company acquired land with the intention to add 1,000 beds in Greenfield hospitals in highly attractive regions where penetration is low. Max Healthcare is a profitable business despite a very aggressive growth plan unveiled in the past three years that allowed its EBITDA to grow more than 50% per year. Max Healthcare has been displaying one of the best standards of clinical excellence and patient care among its peers, which is of prime importance in a country where there is little availability of quality healthcare. Note that Max Healthcare accounts for 8.2% of the fund, an illustration of our willingness to reduce the number of positions and have a more concentrated portfolio that focuses on our strongest convictions. Our top 10 positions account for 48% of the fund, the highest number in years.

During the quarter, we also added Salik, a toll road operator in Dubai. The macro backdrop in the UAE (United Arab Emirates) looks very positive, thanks to the obvious support of higher oil prices, but also to the Government’s successful initiatives to attract business. Salik’s traffic is driven by the demographics of the country, which is dynamic thanks to Dubai’s popularity as a tourist and business hub. The Government put in place the Golden Visa program for retired people and remote workers, it decided to host more than 400 global events per year by 2025 to attract more visitors and launched the 2040 Urban Master Plan to develop and invest in five main urban centers, three of which will be connected to existing toll gates. This plan is expected to increase the population of Dubai to 5.8mn by 2040 from the current 3.4mn. Being a monopolistic State-Owned enterprise, we believe that Salik’s business does not have a material regulatory risk and the valuation exercise is made easier by the automatic inflation adjustment to toll prices. We decided to buy in the IPO of the company because our analysis indicated an attractive Equity risk premium to sovereign yields, which we believe does not make sense with regards to the risk profile of the business.

Outlook for the next months

Taking into account the much higher long term real yields in the US curve, we have decided to have a conservative approach, which is why we have put in place a hedging strategy on our Indian portfolio on both the currency and the Equity market for around 10% of the fund.

While we clearly like the names that we own in India, we acknowledge that Indian Equities have been holding up very well in relative terms, which brings the risk of a sudden draw-down which would affect the fund. We would like to take the opportunity to remind our investors that our hedging strategies are limited in both magnitude and time. They are used in exceptional circumstances for a limited amount of time when we believe that it is in the interest of the fund to use derivatives which are liquid and cost-free rather than move the portfolio directly. We have also reduced the risk of the fund by trimming some of our cyclical positions, especially in Korea and Taiwan, in the semi-conductor space for instance, which are deep cyclical names.

However, as we head into the 4th quarter, we are seeing some signs of capitulation in the market, usually an opportunity to re-expose the fund, which is why we are becoming more and more confident for 2023 and we believe our next moves will be bullish ones.

Sources: Carmignac, Bloomberg, 30/09/2022

[1] Performance of the A EUR acc share class ISIN code: LU0336083810. Past performance is not necessarily indicative of future performance. The return may increase or decrease as a result of currency fluctuations. Performances are net of fees (excluding possible entrance fees charged by the distributor). From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested.
[2] 50% MSCI EM SmallCap (EUR) + 50% MSCI EM MidCap (EUR) (Reinvested net dividends rebalanced quarterly).
Bloomberg, 30/09/2022

Carmignac Portfolio Emerging Discovery

Crossing frontiers to discover small and mid-cap gems

Discover the fund page

Carmignac Portfolio Emerging Discovery A EUR Acc

ISIN: LU0336083810

Empfohlene Mindestanlagedauer

Geringstes Risiko Höchstes Risiko

1 2 3 4 5 6 7
Hauptrisiken des Fonds

AKTIENRISIKO: Änderungen des Preises von Aktien können sich auf die Performance des Fonds auswirken, deren Umfang von externen Faktoren, Handelsvolumen sowie der Marktkapitalisierung abhängt.

RISIKO IN VERBINDUNG MIT SCHWELLENLÄNDERN: Die Bedingungen in Bezug auf die Funktionsweise und die Überwachung der Schwellenländermärkte können sich von den für die großen internationalen Börsenplätze geltenden Standards unterscheiden und Auswirkungen auf die Bewertung der börsennotierten Instrumente haben, in die der Fonds anlegen kann.

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

LIQUIDITÄTSRISIKO: Punktuelle Marktstörungen können die Preisbedingungen beeinträchtigen, zu denen der Investmentfonds gegebenenfalls Positionen auflösen, aufbauen oder verändern muss.

Der Fonds ist mit einem Kapitalverlustrisiko verbunden.

* Risiko Skala von KID (Basisinformationsblatt). Das Risiko 1 ist nicht eine risikolose Investition. Dieser Indikator kann sich im Laufe der Zeit verändern.

Carmignac Portfolio Emerging Discovery A EUR Acc

ISIN: LU0336083810
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 (YTD)
Year to date
Carmignac Portfolio Emerging Discovery A EUR Acc -2.25 % +13.12 % +2.99 % +3.76 % +17.91 % -8.90 % +9.98 % -0.16 % +25.55 % -22.39 % +1.23 %
Referenzindikator -5.19 % +12.98 % +0.19 % +6.67 % +18.14 % -11.64 % +14.39 % +5.35 % +21.27 % -11.67 % +0.84 %

Srollen Sie nach rechts, um die ganze Tabelle zu sehen

3 Jahre 5 Jahre 10 Jahre
Carmignac Portfolio Emerging Discovery A EUR Acc +6.28 % +0.36 % +2.61 %
Referenzindikator +12.42 % +2.80 % +4.22 %

Srollen Sie nach rechts, um die ganze Tabelle zu sehen

Die Wertentwicklung der Vergangenheit ist keine Garantie für die zukünftige Wertentwicklung. Die hier dargestellte Performance des Fonds beinhaltet alle jährlich auf Fondsebene anfallenden Kosten. Um den dargestellten Anlagebetrag von EUR 100 zu erreichen, hätte ein Anleger bei Erhebung eines Ausgabeaufschlags von X% XXX,XX EUR aufwenden müssen. Eventuell beim Anleger anfallende Depotgebühren würden das Anlageergebnis mindern.

Quelle: Carmignac am 28/04/2023

Einstiegskosten : 4,00% des Betrags, den Sie beim Einstieg in diese Anlage zahlen. Dies ist der Höchstbetrag, der Ihnen berechnet wird. 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 : 2,36% 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 : 0,52% 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.