Carmignac Patrimoine : Letter from the Fund Managers

  • -7.45%
    Carmignac Patrimoine’s performance

    in the 1st quarter of 2022 for the A EUR Share class.

  • -3.12%
    Reference indicator’s performance

    in the 1st quarter of 2022 for 40% MSCI ACWI (USD) (Reinvested net dividends) + 40% ICE BofA Global Government Index (USD) + 20% ESTER capitalised.

  • -7.45%
    Performance of the Fund

    Year to date versus -3.12% for the reference indicator.

Carmignac Patrimoine posted a negative performance in a quarter characterized by a general and indiscriminate decline in risky assets, chief among them equities and corporate debt.

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Market Review

Our view going into 2022 was that growth would decelerate from high recovery levels, yet that inflation would be persistently higher. In other words, we saw the world entering a phase of slowflation.

Above all a humanitarian crisis, the Ukraine conflict and resulting sanctions led to an inflationary shock, with an appreciation of broad commodity prices. As a result, markets which were adjusting to an environment of slowflation increasingly integrated the risk of a stagflation over the quarter, with exacerbating decelerating and inflationary forces.

Over the quarter, this environment resulted in the general and indiscriminate decline in risky assets, chief among them equities and corporate debt, with the latter recording its worst performance since March 2020. The Fed’s pivot at the beginning of the year triggered a rapid rise in interest rates and a rotation away from growth sectors. The energy and materials sectors were the only gainers, driven by supply imbalances and resulting higher commodity prices. Gold and the US dollar played their role as safe-haven assets amid uncertainty around the extent of the war.

Performance Review

Over the period, Carmignac Patrimoine posted a negative performance. If our portfolio construction and hedging strategies have been helpful in supporting the performance in adverse markets, we suffered the majority of our losses from our convictions around the Russian complex.

The main contributors to absolute returns were:

1. Russia

  • We had initiated a position on the Russian complex in March of 2020, with a long-term view on the basis of both financial and extra-financial (positive dynamics on several criteria, notably on the environmental pillar), as we do in all circumstances. Although limited to ~5%, our exposure to Russian sovereign debt and mostly credit has strongly penalized the strategy's performance over the period. The sudden rise in these tensions led us to implement strategies to mitigate risks, which did not fully offset the losses related to our Russian exposure.

  • We have decided not to buy any Russian securities until further notice, and are committed to managing the exit of securities still present in the portfolio when market conditions will allow to preserve the interest of our clients, our primary objective.

2. Equity rotation

  • The prolongation of the value rotation environment in the wake of the Fed's pivot along the rapid rise in interest rates penalized part of our long-term bottom-up equity portfolio focused on quality growth stocks as well as defensives. We have continued throughout the quarter to reduce our exposure to stocks sensitive to a rising rate environment.

  • While the rebalancing of our exposure to sectors positively correlated to inflation and higher interest rates (energy and banks) helped somewhat, it was not enough to offset losses incurred elsewhere.

3. Positive contribution of our hedges in a volatile period

  • Over the period, we managed to dampen the effects of falling equity markets, rising rates and widening credit spreads, thanks to an overall cautious positioning.

  • When the conflict started, we positioned the strategy for a full risk-off environment, further reducing the equity exposure (down to a low of 5%), buying positions on core rates and gold, and stepping up our exposure to the USD.


Our view is that the impacts that the Ukrainian conflicts -that resulted in higher inflation- are having on global growth are steadily but not fully integrated by markets.

In Europe, while headline inflation is likely to remain close to 7% this year, survey data point to a major shock to corporate and consumer confidence from the expected real income squeeze. On the bright side, we have seen some form of fiscal response, notably in countries like France and Spain, and additional initiatives are being discussed.

The US are less economically exposed to the conflict than Europe, but the effects of tighter financial conditions and inflation will likely continue chipping away at consumers’ savings and purchasing power. In fact, J.Powell reaffirmed that the Federal reserve would normalize monetary policy “whatever it takes”.

In China, there are hopes that the country will ultimately support growth with hawkish fiscal and monetary policies. If there has been progress, these are just baby steps in what China could do to lift its economy -and support the rest of the world-, especially given its zero-Covid policy in light of rising infections.

From a microeconomic standpoint, companies will, in the next few months, be judged on their ability to weather high and lasting inflation. Indeed, when producer prices rise at a faster rate than consumer prices, it highlights companies’ limited ability in passing their higher input costs on to consumers.


The market environment has never been so full of both risks and opportunities. The end of extraordinary monetary policies means the end of indiscriminate market increases, and the potential of true alpha generation. The end of deeply negative interest rates and asset class correlation as we know it reinforces the importance of a flexible allocation to optimize performance as well as an active management of risks.

With that in mind, here’s how Carmignac Patrimoine expects to deliver returns going forward:


We believe an optimal portfolio construction in this environment balances out both investments whose performance is correlated to rising rates/inflation and investments that are resilient at times of slower growth. In parallel to this Barbell strategy, we hold a strong cash allocation that allows us to build up new positions or strengthen existing ones. Finally, we use all the tools at our disposal to manage the multiple risks that have arisen in this new market set-up.

On the equity side:

  • In line with our view of slowing growth, we favor defensive names, those offering essential goods and services. In an inflationary environment, we also favor quality, characterized by high historical profitability, low levels of debt, and high levels of cash, allowing them to better weather rising rates and costs.

  • We have an overweight in the oil/oil services sectors as geopolitical tensions and supply pressures are supporting energy prices and the ecosystem around them. Taking into account our ESG standards, our exposure revolves around best-in-class traditional companies as well as renewables, which are benefiting from renewed interest as societies are looking to lower their exposure to Russian exports.

  • Finally, we hold an exposure to sectors that benefit from post-Covid reopening demand like travel as consumers are eager to enjoy reopening economies after two years of Covid-related mobility restrictions.

On the fixed income side:

  • Credit spreads have widened across the board, providing interesting individual opportunities notably in the oil & gas industry, but also among financials, that suffered from contagion fears after the start of the conflict and now offer much higher yields.

  • We also favor CLOs (collateralized loan obligation), due to their floating rate structure backed by investment grade loans (BBB) that offer an interesting carry.

Risk management:

  • On the interest rate side, we hold a rather neutral positioning.

  • We also continue to actively manage the equity exposure, by being cautious on vulnerable equity segments.

  • On top of our high cash allocation, we keep an exposure to safe-havens assets like the dollar (31%) and gold (2%), the latter also performing well in inflationary environments.

Carmignac Patrimoine

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Carmignac Patrimoine A EUR Acc

ISIN: FR0010135103

Recommended minimum investment horizon

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Main risks of the Fund

EQUITY: The Fund may be affected by stock price variations, the scale of which is dependent on external factors, stock trading volumes or market capitalization.

INTEREST RATE: Interest rate risk results in a decline in the net asset value in the event of changes in interest rates.

CREDIT: Credit risk is the risk that the issuer may default.

CURRENCY: Currency risk is linked to exposure to a currency other than the Fund’s valuation currency, either through direct investment or the use of forward financial instruments.

The Fund presents a risk of loss of capital.

Carmignac Patrimoine A EUR Acc

ISIN: FR0010135103
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (YTD)
Year to date
Carmignac Patrimoine A EUR Acc +8.81 % +0.72 % +3.88 % +0.09 % -11.29 % +10.55 % +12.40 % -0.88 % -9.38 % +2.20 % +4.86 %
Reference Indicator +15.97 % +8.35 % +8.05 % +1.47 % -0.07 % +18.18 % +5.18 % +13.34 % -10.26 % +7.73 % +3.27 %

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3 Years 5 Years 10 Years
Carmignac Patrimoine A EUR Acc -2.01 % +2.82 % +1.82 %
Reference Indicator +3.05 % +5.25 % +6.28 %

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Source: Carmignac at 31/05/2024

Entry costs : 4,00% of the amount you pay in when entering this investment. This is the most you will be charged. Carmignac Gestion doesn't charge any entry fee. The person selling you the product will inform you of the actual charge.
Exit costs : We do not charge an exit fee for this product.
Management fees and other administrative or operating costs : 1,51% of the value of your investment per year. This estimate is based on actual costs over the past year.
Performance fees : 20,00% max. of the outperformance once performance since the start of the year exceeds that of the reference indicator and if no past underperformance still needs to be offset. The actual amount will vary depending on how well your investment performs. The aggregated cost estimation above includes the average over the last 5 years, or since the product creation if it is less than 5 years.
Transaction Cost : 0,63% of the value of your investment per year. This is an estimate of the costs incurred when we buy and sell the investments underlying the product. The actual amount varies depending on the quantity we buy and sell.

Marketing communication. Please refer to the KID/KIID, prospectus of the fund before making any final investment decisions. This document is intended for professional clients.

This material may not be reproduced, in whole or in part, without prior authorisation from the Management Company. This material does not constitute a subscription offer, nor does it constitute investment advice. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. This material has been provided to you for informational purposes only and may not be relied upon by you in evaluating the merits of investing in any securities or interests referred to herein or for any other purposes. The information contained in this material may be partial information and may be modified without prior notice. They are expressed as of the date of writing and are derived from proprietary and non-proprietary sources deemed by Carmignac to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Carmignac, its officers, employees or agents.

Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged.

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. The portfolios of Carmignac funds may change without previous notice. The reference to a ranking or prize, is no guarantee of the future results of the UCIS or the manager.

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The Funds’ prospectus, KIDs, NAVs and annual reports are available at, or upon request to the Management Carmignac Portfolio refers to the sub-funds of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive. The French investment funds (fonds communs de placement or FCP) are common funds in contractual form conforming to the UCITS or AIFM Directive under French law.

  • In France, Luxembourg, Sweden: The risks, fees and ongoing charges are described in the KID (Key Information Document). The KID must be made available to the subscriber prior to subscription. The subscriber must read the KID. Investors may lose some or all their capital, as the capital in the funds are not guaranteed. The Funds present a risk of loss of capital. The Funds’ prospectus, KIDs, NAV and annual reports are available at, or upon request to the Management.

  • In the United Kingdom: the Funds’ respective prospectuses, KIIDs and annual reports are available at, or upon request to the Management Company, or for the French Funds, at the offices of the Facilities Agent at BNP PARIBAS SECURITIES SERVICES, operating through its branch in London: 55 Moorgate, London EC2R. This document was prepared by Carmignac Gestion, Carmignac Gestion Luxembourg or Carmignac UK Ltd. FP Carmignac ICVC (the “Company”) is an Investment Company with variable capital incorporated in England and Wales under registered number 839620 and is authorised by the FCA with effect from 4 April 2019 and launched on 15 May 2019. FundRock Partners Limited is the Authorised Corporate Director (the “ACD”) of the Company and is authorised and regulated by the FCA. Registered Office: Hamilton Centre, Rodney Way, Chelmsford, Essex, CM1 3BY, UK; Registered in England and Wales with number 4162989. Carmignac Gestion Luxembourg SA has been appointed as the Investment Manager and distributor in respect of the Company. Carmignac UK Ltd (Registered in England and Wales with number 14162894) has been appointed as a sub-Investment Manager of the Company and is authorised and regulated by the Financial Conduct Authority with FRN:984288.

  • In Switzerland: the prospectus, KIDs and annual report are available at, or through our representative in Switzerland, CACEIS (Switzerland), S.A., Route de Signy 35, CH-1260 Nyon. The paying agent is CACEIS Bank, Montrouge, Nyon Branch / Switzerland, Route de Signy 35, 1260 Nyon.

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