Lipper has just named his fund “best diversified fund in Europe”. “. To what do you attribute this success?
mark denham : Carmignac Portfolio Patrimoine Europe was launched in 2017 to offer investors a socially responsible solution with moderate risk in an ever-changing European environment. Over the last four years, and despite a very volatile environment, our fund has been able to cushion the market downturns and participate in the upswings, both during 2020 and early 2022. The fund offers investors an attractive risk/risk profile. reward, thanks in particular to our stock selection and risk management strategies. In this, the fund goes far beyond a simple allocation of stocks and bonds. As specialists in stock selection, we thoroughly analyze our investments and make sure that we do not accumulate risks in the portfolio.
As a result, our risk management strategies have contributed positively to the fund’s performance since its inception. The many tools at our disposal have mitigated downside risk and generated a positive gross return. However, over the long term, it is our stock and bond selection that appears to be the main contributor to the fund’s performance, and that is what we want.
The fund is based on the “Heritage” philosophy characterized by a flexible, long-term, multi-asset class approach. What makes Carmignac Portfolio Patrimoine Europe different from the flagship Carmignac Patrimoine fund?
Keith Nei: Sharing the same philosophy does not necessarily mean investing in the same way. Carmignac Portfolio Patrimoine Europe is very different from the European pocket of Carmignac Patrimoine. In addition to the fact that they do not have the same investment universe, which significantly affects the way they are managed, these two Funds also differ in their stock selection, both in equities and fixed income. The particularly low growth rate seen in Europe forces us to target secular growth stocks to make up for this deficiency in our investment universe.
On the contrary, in the bond segment, the tightening of financial regulations and the low level of interest rates require a more aggressive approach in the interest rate and credit markets and a search for higher yields thanks to a greater orientation. to value. As a result, the two funds have very little in common and low correlation, making them complementary within an investor’s portfolio.
What are the main risks ahead and how do you plan to manage them?
Keith Ney : The conflict between Russia and Ukraine and the economic sanctions associated with it induce a risk of stagflation, that is, an economic slowdown combined with high inflation. The scarcity of available raw materials could lead to major disruptions in supply chains, with negative effects on growth and higher prices. While the economic outlook for 2022 already suggested a slowdown in the pace of growth and persistent inflation, this conflict is now amplifying the economic trends that we had integrated into our investment strategy.
In the short term, we are primarily concerned with managing the bear market and the high volatility associated with it. Over the long term, this delicate environment will be an opportunity to take advantage of the sharp correction in corporate bonds and equities to carefully select certain idiosyncratic themes and build on the future return potential of the portfolio. Although Europe is particularly affected by this geopolitical crisis, we expect a strong budgetary response from governments that could benefit certain sectors, such as renewable energy.
About these sectors, can you say more about their long-term investment opportunities?
mark denham : Historically, the Fund has had exposure to promising sectors such as healthcare, technology and renewable energy. Our approach to Europe is particularly selective and based on a robust process. In the current environment, we remain true to our strategic positions representing the winning companies in their respective fields, but we are also making certain adjustments, for example by increasing our defensive exposure. Thanks to risk management strategies, we are able to gain exposure to these promising sectors without increasing the risk level of the fund in the short term.
Carmignac Portfolio Heritage Europe in brief
The Fund was launched in 2017 to provide investors with a medium risk sustainable solution in an ever-changing European environment. The fund is characterized by a flexible multi-asset class and a long-term focus. Its ambition is to identify promising stocks in the European equity and fixed income markets while adapting to different market configurations and bear markets in particular. As a result, exposure to equity markets can vary from 0% to 50% of the portfolio knowing that we have the ability to change this exposure at any time, allowing us to react quickly and effectively whenever economic conditions , political or social seem to change. us to require it.
Evidence of the Fund’s ability to achieve the objective of its mandate:
- Yield of 26.7% since inception vs. 11.9% for its benchmark(1).
- 1st quartile within its Morningstar category in profitability, volatility, Sharpe and Sortino ratios, as well as maximum loss(2).
- 1st place: Best 3-year Fund in Europe, prize awarded by Lipper at the Lipper Fund Awards 2022(3)
1 40% STOXX Europe 600 (net dividends reinvested), 40% ICE BofA All Maturity All Euro Government, 20% capitalized ESTER. Quarterly rebalancing. Until 12/31/2021, the reference indicator was composed of 50% the STOXX Europe 600 Index and 50% the BofA Merrill Lynch All Maturity All Euro Government Index. The performances are presented according to the chaining method. Past performance is not a guarantee of future results. They are net of fees (excluding any entry fees applied by the distributor). Launch of the Fund: 12/29/2017. Source: Carmignac 06.30.2022. Yield of the share A eur acc.
2 Morningstar Category „Moderate allocation in EUR“. The reference to a classification or a price does not prejudge the future classifications or prices of these IICs or of the management company. Morningstar Rating™: © 2021 Morningstar, Inc. All Rights Reserved
3 Lipper Methodology: https://www.lipperfundawards.com/Methodology
Source: BFM TV
