Fixed income strategies

Carmignac Portfolio Flexible Bond

SICAVGlobal marketSRI Fund Article 8
Share Class

LU0336084032

A flexible solution aiming to capture bond opportunities globally
  • A conviction-driven Fund aiming to seize global bond markets opportunities while systematically hedging the currency risk.
  • An investment process based on a top-down asset allocation and a bottom-up implementation of interest rate and credit strategies.
Asset Allocation
Bonds79.3 %
Other20.7 %
Data as of:  29 Feb 2024.
Risk Indicator
2/7
Recommended Minimum Investment Horizon
3 years
Cumulative Performance since launch
+ 27.2 %
+ 10.8 %
+ 11.2 %
- 2.1 %
+ 4.4 %
From 14/12/2007
To 15/03/2024
Calendar Year Performance 2023
+ 2.0 %
- 0.7 %
+ 0.1 %
+ 1.7 %
- 3.4 %
+ 5.0 %
+ 9.2 %
-
- 8.0 %
+ 4.7 %
Net Asset Value
1271.8 €
Asset Under Management
1 312 M €
Market
Global market
SFDR - Fund Classification

Article

8
Data as of:  15 Mar 2024.
​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.

Carmignac Portfolio Flexible Bond fund performance

Take a look at the Fund's performance supported by our Fund managers’ market commentary and strategy insight.

Our monthly comments

Data as of:  29 Feb 2024.
Fund management team
[Management Team] [Author] Rigeade Guillaume

Guillaume Rigeade

Co-Head of Fixed Income, Fund Manager
[Management Team] [Author] Eliezer Ben Zimra

Eliezer Ben Zimra

Fund Manager

Market environment

February was a turning point for the disinflation trend that had been shoring up the markets over previous months. Growth figures brought more pleasant surprises on both sides of the Atlantic, but the (dis)inflation trend disappointed investors. While credit indices continued to benefit from growth being stronger than anticipated, sovereign assets performed much less glowingly, with traders forced to lower their expectations of central bank rate cuts in 2024. In the United States, leading and lagging indicators seem to be converging towards a single benign growth scenario. Both the manufacturing and service components of PMIs improved, and consumer confidence picked up further in February, showing businesses’ and households’ shared enthusiasm about the economic outlook. This US economic exceptionalism results from the knock-on effects of a growing labour market, on which job reports were surprisingly positive once again. However, this frenetic growth seems to impinge on the immaculate disinflation scenario that had been underpinning risk appetite. While headline inflation continues to benefit from the sharp drop in commodity prices, core inflation disappointed investors, sticking at +3.9% y/y, while the services price index rebounded to +5.4% y/y. The US Federal Reserve chair therefore took a less dovish than expected tone, driving up yields. The 10-year Treasury yield gained 34 bps over the month, reversing last December’s bond rally. Albeit to a lesser extent, the Eurozone also showed signs of progress with leading indicators still rebounding as the services sector expands. Inflation slowed by less than expected due to the robust services component of core inflation. While wage growth seems to have peaked, the figure of +4.5% y/y remains well above the European Central Bank’s inflation target. This combination of firmer growth and stickier inflation led to the 10-year Bund yield gaining 25 bps, while risky assets made further progress as high yield spreads narrowed by 23 bps. Japan’s complacent monetary policy seems even more likely to end with the publication of higher-than-expected core inflation, above the 2% mark for the 11th month in a row.

Performance commentary

February was a good month for our strategy, which delivered a positive return as our reference indicator dropped sharply. Most of this outperformance resulted from our exposure to credit, which continues to generate steady positive returns thanks to the attractive carry on this asset class. Our inflation-linked bond strategies were also particularly effective at a time when price indices were surprisingly high in both the United States and Europe. Our emerging market sovereign debt holdings performed well too. Special investment cases such as Egypt raised performance considerably. It is also worth noting that our modified duration was relatively low, and this made a big difference to the lead over our reference indicator. We nonetheless made some adjustments, increasing our hedging of credit assets and US breakeven inflation while keeping modified duration low, with a preference for Euro debt, which we strengthened at the expense of US debt.

Outlook strategy

The horizon seems to have cleared for the markets as the various data appear to show that the prospect of a recession in the United States is receding. The “no landing” scenario for the US economy provides a catalyst for risky assets, even in Europe where the economy keeps bordering on stagnation. On the bond front, credit remains the cornerstone of our portfolio, being a direct recipient of flows from the money market, and delivering an attractive return. However, in the short term we think that tactical hedging could be interesting to improve the portfolio’s risk elasticity, given that we are in a poor geopolitical situation and the prospect of US regional bank incidents seems to be mounting. Our sovereign bond exposure has been taken in expectation of a steeper yield curve, as the level of short-term yields in both the Eurozone and United States now seems right after the upward movement at the beginning of the year, whereas long rates are being held back by growth figures and debt trajectories in developed economies. The inflation trend should be viewed as a decisive factor in the construction of our portfolio, as recent statistics have once again shown the resilience of core consumer price indices in both the United States and Europe. Complacency over disinflation could prove naive ahead of the US Federal Reserve’s monthly meeting on 20 March, suggesting that we should keep modified duration at a moderate level, and some exposure to inflation-linked instruments.

Performance Overview

Data as of:  15 Mar 2024.
​Past performance is not necessarily indicative of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor). 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.The return may increase or decrease as a result of currency fluctuations, for the shares which are not currency-hedged.
Source: Carmignac at 19/03/2024

Carmignac Portfolio Flexible Bond Portfolio overview

Below is an overview of the composition of the portfolio.

Geographical Breakdown

Data as of:  29 Feb 2024.
Europe68.4 %
North America10.3 %
Eastern Europe8.0 %
Latin America7.3 %
Africa3.2 %
Middle East1.5 %
Asia1.0 %
Asia-Pacific0.3 %
Total % of bonds100.0 %
Europe68.4 %
frFrance
13.4 %
itItaly
12.4 %
gbUnited Kingdom
9.0 %
ieIreland
9.0 %
Grèce
6.2 %
esSpain
3.5 %
deGermany
3.0 %
nlNetherlands
2.8 %
Norvège
2.7 %
atAustria
1.5 %
ptPortugal
1.5 %
smSanMarino
1.0 %
chSwitzerland
0.9 %
adAndorra
0.8 %
Suède
0.8 %

Key figures

Below are the key figures for the Fund, which will give you a clearer idea of the Fund's management and bond positioning.

Exposure Data

Data as of:  29 Feb 2024.
Modified Duration2.3
Yield to Worst5.3 %
Yield to Maturity5.6 %
Average Coupon4.5 %
Number of Issuers153
Number of Bonds196
Average RatingBBB

The strategy in a nutshell

Discover the Fund’s main features and benefits through the words of the Fund Managers.
Fund Management Team
[Management Team] [Author] Rigeade Guillaume

Guillaume Rigeade

Co-Head of Fixed Income, Fund Manager
[Management Team] [Author] Eliezer Ben Zimra

Eliezer Ben Zimra

Fund Manager
Eliezer and myself are managing this strategy with the objective to offer investors a flexible and diversified investment solution investing across fixed income markets, while hedging the currency risk.
[Management Team] [Author] Rigeade Guillaume

Guillaume Rigeade

Co-Head of Fixed Income, Fund Manager
View Fund's characteristics
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.
The information presented above is not contractually binding and does not constitute investment advice. Past performance is not a reliable indicator of future performance. Performances are net of fees (excluding possible entrance fees charged by the distributor), where applicable. Investors may lose some or all of their capital, as the capital in the UCI is not guaranteed. Access to the products and services presented herein may be restricted for some individuals or countries. Taxation depends on the situation of the individual. The risks, fees and recommended investment period for the UCI presented are detailed in the KIDs (key information documents) and prospectuses available on this website. The KID must be made available to the subscriber prior to purchase.). The reference to a ranking or prize, is no guarantee of the future results of the UCITS or the manager.
Carmignac Portfolio is a sub-fund of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive.