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Carmignac Emergents: Letter from the Portfolio Manager

  • Auteur(s)
    Xavier Hovasse
  • Gepubliceerd
  • Lengte
    4 minuten leestijd

During the last three months of the year, Carmignac Emergents (A EUR Acc) recorded a performance of +24.1%* versus 14.7% for its reference indicator. In 2020, the Fund returned +44.7%*, outperforming its reference indicator that was up only +8.5%.

The Emerging Market


In 2020, despite the pandemic that wrecked the world economy, emerging markets were supported by increased global liquidity, driven by dovish central-bank policies, with Fed and the ECB expanding their balance sheets very aggressively to finance large fiscal stimulus programs. Emerging markets were also up during the last quarter, driven by the Biden victory in the US elections and the approval of vaccines, fuelling hopes that pandemic fears will be behind us after the first half of 2021.

Portfolio Management


2020 will be remembered not only for the pandemic, but also as the year in which the digital revolution accelerated dramatically. Lockdown measures have benefited e-commerce players, with an unprecedented boost in adoption of all sorts of digital services. Carmignac Emergents has been positioning itself on this theme for years, increasing its exposure to the digital world and to investment themes that will be the main beneficiaries of this revolution on all continents and in all sectors.

  • For example, in Latin America we have been investing in Mercado Libre, the leader in eCommerce and online payments since 2015. In Southeast Asia with Sea, a gaming platform that has grown into a giant in online commerce. In Russia with Yandex, the Russian search engine that takes market share from Google every year and has extended its ecosystem to cabs by merging with Uber in Russia. In Poland with Allegro, the "Polish Amazon". In Korea with Samsung Electronics.

  • And what about China? We have been avoiding the companies of the old economy (banking, construction, mining), investing instead in the growing New Economy sectors, with investment themes geared towards the digital revolution the such as the Cloud (Kingsoft Cloud, Ming Yuan Cloud), e-commerce (JD.com, VIP Shop), or healthcare (Ping An Good Doctor, Zhifei, Wuxi Biologics).

These thematic positioning choices, favoring beneficiaries of digital revolution, along with good stock picking decisions explain the performance of the fund in 2020

Another key point worth highlighting: Our "Socially Responsible" investment approach embedded in our investment process also greatly contributed to the fund's performance in 2020.

How? By making us stay away of oil companies, almost all of which are owned by the governments or avoid airline & mining companies with past controversies, favoring instead companies that have positive impact on environment or societies, by trying to improve the living standards within emerging countries. We can give the example of our investments in the green mobility thematics, with our investments in electric vehicle production chain (leading battery manufacturer LG Chem in Korea, Nio “the Chinese Tesla” in China) contributing positively to performance in 2020.

Quick overview of our top contributors in 2020:

Carmignac

The portfolios of Carmignac funds may change without previous notice. The trademarks and logos are used with the authorisation of the respective entities and do not imply any affiliation with or endorsement by them. Source: Carmignac, Company data, 31/12/2020
*For the A EUR Acc share class. Reference indicator : MSCI EM NR USD converted into EUR.

Investment Outlook


After this very special year 2020, we ask ourselves the following questions:

  • With mass vaccination and the gradual return to normal, are we going to see a return to favor of neglected themes such as cyclical values or so-called "value" values? Will the EMEA and Latin America regions rebound?

  • Will emerging equities finally outperform after a decade of marked underperformance?

The increases in the size of US and European central bank balance sheets implemented at the time of the lockouts and to finance fiscal stimuli are leading to an unprecedented increase in global liquidity. A bearish cycle on the dollar seems very likely and it is very positively correlated with positive performance for emerging markets. North Asian economies have grown faster than developed countries while benefiting from much lower fiscal and monetary stimuli. Their economic fundamentals are therefore stronger than those of the developed countries. This is why, most of our investments remain and will remain focused on this region, which has very high potential growth in our view.

Current positioning & investment thematics:

Carmignac

Portfolio composition may vary over time. Reference to certain securities and financial instruments is for illustrative purposes to highlight stocks that are or have been included in the portfolios of funds in the Carmignac range. This is not intended to promote direct investment in those instruments, nor does it constitute investment advice. The Management Company is not subject to prohibition on trading in these instruments prior to issuing any communication. Source : Carmignac 31/12/2020

However, good long-term geographic & thematic allocation choices, are not, by themselves enough to deliver solid risk adjusted returns. It is crucial to take into account cyclical and sector rotations and manage the portfolio actively to adapt to a changing environment to seize the opportunities as they arise. That is why, we try to remain disciplined in position sizing & profit taking, constantly reviewing fundamentals, valuations, target prices of companies & countries we invest in. Therefore, during the fourth quarter of 2020, we made a few adjustments to our positioning to take into account cyclical rotation in markets:

  • We have increased our exposure to the EMEA and Latin America regions, and to countries with less strong but improving macro fundamentals, as the depreciation of currencies has led to a drastic rebalancing of their balance of payments. It is the case of Brazil; whose current account is in surplus for the first time in 14 years. We accordingly stepped up our exposure to the country, along with Russia posting decent and improving fundamentals as well.

  • Finally, we also rebalanced the portfolio towards more cyclical assets in order to take advantage/benefit as much as possible from the rebound we expect from emerging markets in 2021. We increased our exposure to “value” or quality cyclical companies with very attractive valuations such as Samsung Electronics or Hyundai Motor in Korea.

    Discover the Fund’s webpage:


Carmignac Emergents A EUR Acc

ISIN: FR0010149302
2016 2017 2018 2019 2020
Carmignac Emergents A EUR Acc +1.39 % +18.84 % -18.60 % +24.73 % +44.66 %
Referentie-indicator +14.51 % +20.59 % -10.27 % +20.61 % +8.54 %

Scroll right to see full table

3 jaar 5 jaar 10 jaar
Carmignac Emergents A EUR Acc +18.29 % +10.04 % +8.23 %
Referentie-indicator +8.64 % +8.56 % +7.33 %

Scroll right to see full table

Het beheer van dit deelbewijs/deze aandelenklasse is niet gebaseerd op de indicator. Resultaten en waarden uit het verleden zijn geen indicatie voor toekomstige resultaten en waarden. Het rendement is na aftrek van alle kosten, met uitzondering van de eventuele in- en Uitstapvergoeding, en is verkregen na aftrek van de kosten en belastingen die gelden voor een gemiddelde particuliere cliënt die als natuurlijke persoon in België woont. Wanneer de valuta verschilt van uw valuta, bestaat er een wisselkoersrisico, waardoor de netto-inventariswaarde lager kan uitvallen. De referentievaluta van het fonds/compartiment is EUR.

Bron: Carmignac op 30/09/2021

Source: Carmignac, EM Advisors Group, Bloomberg, 31/12/2020. Carmignac Emergents A EUR Acc (ISIN: FR0010149302). Reference indicator: MSCI EM NR USD. Daily returns in EUR as of 31/12/2020. Past performance is not necessarily indicative of future performance. The return may increase or decrease as a result of currency fluctuations. The portfolios of Carmignac funds may change without previous notice.


Carmignac Emergents A EUR Acc

ISIN: FR0010149302
Risico- en opbrengstprofiel

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.

Aanbevolen minimale beleggingstermijn

Laagste risico Hoogste risico

Potentieel lager rendement Potentieel hoger rendement

1 2 3 4 5 6 7
Voornaamste risico's

Risico's die in de indicator niet voldoende in aanmerking worden genomen:

TEGENPARTIJRISICO: Risico van verlies indien een tegenpartij niet aan haar contractuele verplichtingen kan voldoen.

Inherente risico's:

AANDELENRISICO: Risico dat aandelenkoersschommelingen, waarvan de omvang afhangt van externe economische factoren, het kapitalisatieniveau van de markt en het volume van de verhandelde aandelen, het rendement beïnvloeden.

RISICO VAN OPKOMENDE LANDEN: Risico dat de operationele voorwaarden en het toezicht op de "opkomende" markten afwijken van de normen die op de grote internationale beurzen gelden. Dit kan gevolgen hebben voor de beurswaarde.

VALUTARISICO: Het wisselkoersrisico hangt samen met de blootstelling, via directe beleggingen of valutatermijncontracten, aan andere valuta’s dan de waarderingsvaluta van de ICBE.

RISICO VAN KAPITAALVERLIES: Dit deelbewijs/deze aandelenklasse biedt geen garantie voor of bescherming van het belegde kapitaal. U ontvangt mogelijk niet het volledige belegde bedrag terug.

Meer informatie over de risico's van het deelbewijs/de aandelenklasse is te vinden in het prospectus, met name in hoofdstuk "Risicoprofiel", en in het document met essentiële beleggersinformatie.

* 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.