Carmignac Portfolio Human Xperience: Letter from the Fund Manager

  • Author(s)
    Obe Ejikeme
  • Published
  • Length
    4 minute(s) read
  • -1.84%
    Carmignac Portfolio Human Xperience’s performance

    in the 3rd quarter of 2022 for the A EUR Share class

  • -0.56%
    Reference indicator’s performance

    in the 2nd quarter of 2022 for MSCI ACWI

  • -14.78%
    Performance of the Fund

    over 12 months versus -6.14% for the reference indicator

During the third quarter of 2022, the return of Carmignac Portfolio Human Xperience (A share class) was -1.84%. This compares to a return on the funds reference indicator1 of -0.56% over the same period.

Quarterly Performance Review

The dominant themes impacting markets in the third quarter were macroeconomic considerations including persistent inflationary pressures and increasingly hawkish commentary from central banks especially the Federal reserve in the US, as well as the rising prospect of weakening economic growth and recession in 2023. In July, equity markets rose on hopes of fast declines in inflation in the US, but these hopes and the July rally came to nought as we have seen a succession of stronger than expected employment and inflation reports, as well as consistently hawkish commentary from policymakers such as the US Federal Reserve. Sharp tightening by Central banks and markets’ disillusion stirred chaos, with volatile moves across asset classes. The yield on the US 10-year bond first dropped 1 percentage point to 2.5% before rallying to 4% over the period. The MSCI AC World rallied sharply from its low, then corrected 16% from its August high. Oil prices increased by $10 before losing $20 to $90 a barrel. Finally, the Dollar rallied 9% against a basket of currencies.

During Q3, Consumer Cyclicals were an area of weakness for the fund, led by Adidas and Puma. Adidas and Puma fell by 30% and 24% respectively as both companies battled with excess inventories and discounting, a trend which is affecting the whole industry. The fall in demand in major Western markets as well as the traffic-drop in China have created some near-term uncertainties and subsequent downgrades to outlooks. We remain modestly positioned in both names and are looking to increase exposure on signs that 1) the inventory overhang is behind us and 2) the outlook for demand starts to improve.

Elsewhere, we saw weakness in the Technology space. Nvidia fell by 14% in the quarter as Q2 numbers confirmed that their gaming chip activity is in decline with sales falling of 33%. This is explained by a decline in end demand and the inventory winding down of old models ahead of new launches in the coming months. In addition, the US government restricted the sale of leading-edge artificial intelligence application chips to China in September, where Nvidia has exposure to the tune of about 7% of sales. We maintain our exposure to this name, which is at the forefront of chip development and where notwithstanding these temporary setbacks, future growth should be underpinned by attractive prospects in virtual reality applications, artificial intelligence, data centre architecture developments and more advanced gaming solutions.

Amongst the strong performers in Q3 were both Hilton Worldwide Holdings (+15%) and Marriott International (+10%). Both companies have been hit by the covid crisis and subsequent lockdowns limiting tourism and business travel. In the case of Marriott, occupancy has since recovered to almost 70% with room rates at a level 7% above pre-covid rates. News flow wise, Hilton was recently ranked no2 in the ‘Fortune 100 Best Companies To Work For’, the 4th consecutive year that the hotel group has retained a top 3 spot. Both investments remain significant holdings within the fund.

Fund Positioning

We ended the quarter with 40% of the fund in both Health Care and Consumer Staples stocks (20% in each of the sectors). Both sectors have a more defensive tilt and should prove to be resilient vs. the more economically sensitive sectors as we enter a period of economic uncertainty.

In the healthcare sector, whilst Danaher and Roche contributed positively over the quarter +8% and +5% respectively, the negative price action of many of large cap European pharmaceutical names largely fuelled by concerns about upcoming multi-district litigation in the United States over heartburn drug Zantac also affected our Sanofi holding. We reduced this holding during the quarter as we assess the medium-term implications and have added Pfizer the maker of Centrum and the joint developer of the covid vaccine. Pfizer was ranked 29 out of 800 in the recent Forbes ‘World’s Best Employers’ list up from 68 last year and continues to have some of the highest customer satisfaction scores across its range of products making it a long-term attractive story for the fund.

Within Consumer Staples, General Mills and Diageo the maker of Bailey’s Irish cream both rose +8% and +5% respectively during the quarter. Generals Mills the maker of Cheerios reported robust revenue growth of +4% in Q2 and profits that were up +13% on the previous year when adjusted for currency effects. This was followed by a raise in outlook for the year of 2023 highlighting how they continue to execute well despite the current challenging macro environment. Both companies appear to be benefiting from adjusting consumer behaviours. Whilst consumer spending might be falling the increase in at-home dining vs. eating out has been a positive for these stocks.

Some of the other better relative performers in the quarter included:

PaypalSpecialty Finance and Services Retail+31%
SodexoHospitality Services+15%
Amazon.comFood and Staples Retail+14%
LululemonConsumer Retail+9%
IntuitSoftware and Consulting+7%


Our focus remains on identifying and owning companies which exhibit strong customer and employee characteristics that we believe have the best prospects for a 5 year or longer time horizon. With inflation fears potentially abating as seen recently in asset classes such as commodities, and consumer confidence around the world near record low levels, we see the set up for the next 6 – 12 months as a positive one from an investment perspective. The market year-to-date has created a unique set of opportunities that we will look to capitalise on.

Carmignac Portfolio Human Xperience

A thematic fund focused on customer and employee experience

Discover the fund page

Carmignac Portfolio Human Xperience A EUR Acc

ISIN: LU2295992163
2019 2020 2021 2022 2023 2024 (YTD)
Year to date
Carmignac Portfolio Human Xperience A EUR Acc - - +19.24 % -21.82 % +22.62 % +8.05 %
Reference Indicator - - +17.15 % -13.01 % +18.06 % +10.79 %

Scroll right to see full table

3 Years 5 Years 10 Years
Carmignac Portfolio Human Xperience A EUR Acc +6.72 % - -
Reference Indicator +9.36 % - -

Scroll right to see full table

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 : 1,80% of the value of your investment per year. This estimate is based on actual costs over the past year.
Performance fees : 20,00% when the share class overperforms the Reference indicator during the performance period. It will be payable also in case the share class has overperformed the reference indicator but had a negative performance. Underperformance is clawed back for 5 years. 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 : 0,26% 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.

Carmignac Portfolio Human Xperience A EUR Acc

ISIN: LU2295992163

Recommended minimum investment horizon

Lower risk Higher risk

1 2 3 4 5 6 7
Main risk 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.

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.

DISCRETIONARY MANAGEMENT: Anticipations of financial market changes made by the Management Company have a direct effect on the Fund's performance, which depends on the stocks selected.

The Fund presents a risk of loss of capital.

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.

Morningstar Rating™ : © Morningstar, Inc. All Rights Reserved. The information contained herein: is proprietary to Morningstar and/or its content providers; may not be copied or distributed; and is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Access to the Funds may be subject to restrictions regarding certain persons or countries. This material is not directed to any person in any jurisdiction where (by reason of that person’s nationality, residence or otherwise) the material or availability of this material is prohibited. Persons in respect of whom such prohibitions apply must not access this material. Taxation depends on the situation of the individual. The Funds are not registered for retail distribution in Asia, in Japan, in North America, nor are they registered in South America. Carmignac Funds are registered in Singapore as restricted foreign scheme (for professional clients only). The Funds have not been registered under the US Securities Act of 1933. The Funds may not be offered or sold, directly or indirectly, for the benefit or on behalf of a «U.S. person», according to the definition of the US Regulation S and FATCA. 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, 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.

The Management Company can cease promotion in your country anytime. Investors have access to a summary of their rights in English on the following links: UK ; Switzerland ; France ; Luxembourg ; Sweden.