Carmignac Sécurité : Letter from the Fund Manager

  • -0.47%
    Carmignac Sécurité’s performance

    in the 4th quarter of 2021 for the A EUR Share class

  • -0.27%
    Reference indicator’s performance

    in the 4th quarter of 2021 for ICE BofA ML 1-3 years Euro All Government Index (EUR)

  • +0.22%
    Performance of the Fund Year to date

    versus -0.71% for the reference indicator

Quarterly Performance Review

The third quarter ended with central banks trying to reassure investors that inflation was transitory. In the fourth quarter their tone changed dramatically, with monetary institutions signaling that they needed to act faster and harder. This radical change in tone from the monetary authorities (led by the Bank of England, followed by the Federal Reserve and then the European Central Bank) was a source of volatility in the markets. Adding to the confusion, the appearance of the new Omicron variant at the end of the year generated additional uncertainty for investors as to the potential effects on inflation and growth.

On the markets, this change in tone was reflected in the United States by a strong flattening of the yield curve, with 10-year maturities remaining stable while 2-year and 5-year maturities tightened by 46 and 30 basis points respectively. In the Eurozone, the ECB at its last meeting of the year clearly expressed its desire to reduce its extreme accommodative policy by starting to drastically reduce its purchases in 2022. It is therefore logical that the strongest effects were concentrated on the non-core countries: while German 10-year rates only moved slightly, Italian spreads widened by nearly 30 basis points to end the year at 135 basis points against Germany.

Credit underperformed government debt, with spreads widening by about 12 basis points. On the other hand, spreads against swaps remained almost stable over the quarter, reflecting above all an increase in the price of sovereign debt against swaps rather than an aversion to credit risk. However, the effect of rising interest rates on the credit market, which can be quantified at around 15 basis points, persisted, penalizing the performance of this asset class and therefore our portfolio.

How is the fund positioned?

In this context, the fund nevertheless took advantage of the rise in yields to gradually increase its exposure to credit names during the quarter. The proportion allocated to these securities (excluding Collateralized Loans Obligation - CLO) rose from 51% to 56% at the end of the year, with a contribution to total modified duration that increased by around 20 basis points. The share of CLOs remained stable at 7.2% and remains concentrated on the most secure parts of the capital structures. In the same vein, the emerging countries share was gradually increased to reach 25 basis points of duration at the end of the year (compared to 15 basis points at the beginning of the period). This asset class seems to us to be promising and offers resolutely positive returns, even after taking inflation into account, in a world still marked by very low real rates. To counterbalance this increase in spread products in the portfolio, two major actions have been implemented: firstly, an increase in liquidity to reduce volatility in the run-up to December, when interest rate movements can become erratic in the absence of investment banks with the closure of trading books and central banks that paused their end-of-year buying programme. We then decided to reduce the overall duration of the portfolio by reducing our exposure to peripheral countries, as the end of ECB purchases should be detrimental to them, and by maintaining a negative exposure to the rates of core countries, led by the United States and the euro zone. Only the exposure to the United Kingdom went from negative to positive during the quarter, with the short end of UK rates anticipating too many rate hikes from their central bank.

What is our outlook for the coming months?

The beginning of 2022 should allow the portfolio to continue to re-expose itself to spread products, particularly in credit and, to a lesser extent, in emerging debt, thanks to a primary market that is expected to be vigorous in the first few weeks of the year. The liquidity envelope should therefore naturally decrease but particular attention will be given to controlling our level of volatility. On the other hand, the total duration of the portfolio should remain low overall, as the combination of less accommodative Central Banks and still strong inflation figures argue for higher nominal rates.

Carmignac Sécurité

Flexible, low duration solution to challenging European markets

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Carmignac Sécurité AW EUR Acc

ISIN: FR0010149120
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (YTD)
Year to date
Carmignac Sécurité AW EUR Acc +1.69 % +1.12 % +2.07 % +0.04 % -3.00 % +3.57 % +2.05 % +0.22 % -4.75 % +4.06 % +1.69 %
Reference Indicator +1.83 % +0.72 % +0.30 % -0.39 % -0.29 % +0.07 % -0.15 % -0.71 % -4.82 % +3.40 % -0.08 %

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3 Years 5 Years 10 Years
Carmignac Sécurité AW EUR Acc +0.18 % +1.10 % +0.68 %
Reference Indicator -0.68 % -0.52 % -0.13 %

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Source: Carmignac at 31/05/2024

Entry costs : 1,00% 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 : 1,11% of the value of your investment per year. This estimate is based on actual costs over the past year.
Performance fees : There is no performance fee for this product. 
Transaction Cost : 0,24% 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 Sécurité AW EUR Acc

ISIN: FR0010149120

Recommended minimum investment horizon

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Main risks of the Fund

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.

RISK OF CAPITAL LOSS: The portfolio does not guarantee or protect the capital invested. Capital loss occurs when a unit is sold at a lower price than that paid at the time of purchase.

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.

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.

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.