Equity strategies

Carmignac Portfolio China New Economy

SICAVEmerging marketsSRI Fund Article 8
Share Class

LU2295992320

Seize the growth potential of China's New Economy
  • Investing with conviction: Seeking companies in China's New Economy, which benefit from the country's economic transition and long-term reform.
  • Investing with selectivity: Favoring domestic quality companies which have high income visibility, while avoiding those linked to external demand.
Asset Allocation
Equities97.2 %
Other2.8 %
Data as of:  28 Mar 2024.
Risk Indicator
6/7
Recommended Minimum Investment Horizon
5 years
Cumulative Performance since launch
- 53.0 %
-
-
- 51.2 %
- 14.7 %
From 31/03/2021
To 16/04/2024
Calendar Year Performance 2023
-
-
-
-
-
-
-
- 35.6 %
- 5.2 %
- 22.5 %
Net Asset Value
47.0 €
Asset Under Management
62 M €
Market
Emerging markets
SFDR - Fund Classification

Article

8
Data as of:  16 Apr 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 China New Economy 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 Mar 2024.
Fund management team
[Management Team] [Author] Li-Labbe Haiyan

Haiyan Li-Labbé

Fund Manager

Market environment

Chinese markets were stable (+0.14% for the CSI 300 and +0.18% for the Hang Seng). Early in the month, the government announced it would be targeting 5% growth over the year and trying to cap the deficit at 3% of GDP, but its optimism failed to convince investors. China continues to face structural problems despite a slight improvement in certain economic indicators. For example, the NBS manufacturing PMI rose to 50.8 in March from 49.1 in February, and inflation of +0.7% put an end to five months of deflation. There was plenty of bad news on the geopolitical front. Firstly, US legislators presented a bill giving ByteDance six months to sell TikTok, failing which it will be banned in the United States to address national security concerns. A US Senate committee also put forward a bill that could prevent Chinese biotech companies from bidding for federal contracts.

Performance commentary

The Fund delivered a very good performance in March, beating its reference indicator. EHang was largely to thank. This flying taxi company published much better results for Q4 2023 (CNY 56.6m vs CNY 15.7m a year earlier). After being awarded an official Chinese safety certificate last year, EHang has started to sell its first models. Our portfolio also received a boost from Daqo Energy, which appreciated after posting 47.8% y/y growth in Q4 2023. Our consumer discretionary stocks such as JD.com, MINISO and Tencent Music Entertainment made some of the biggest contributions. Diversification towards Taiwan through exposure to stocks along the semiconductor chain also paid off. For example, Taiwan Semiconductor and Lotes made positive contributions. Tal Education and New Oriental Education soared in February but lost some ground in March.

Outlook strategy

Despite short-term volatility and the structural challenges facing the economy, we still have an optimistic view of Chinese equity markets. We are seeing a slight improvement in certain economic indicators. For example, the NBS manufacturing PMI rose to 50.8 in March from 49.1 in February, and inflation of +0.7% put an end to five months of deflation. Foreign demand is heading in the right direction too, and local government stimulus is starting to pay off. The economic transition towards industrial sectors (albeit at the expense of traditional growth-driving sectors such as real estate and the internet) is starting to have a positive effect on exports. However, China’s structural problems remain with domestic consumption barely moving, especially among the middle classes now that house prices have fallen and youth unemployment is high. Selectivity is essential. Our approach is centred around stock selection, with a particular focus on companies’ valuations and fundamentals. We feel sure that our approach, centred around a fundamental analysis and enterprise values, is the best way to generate positive long-term returns on Chinese markets. We remain convinced about the potential for China’s new economy, and in particular the secular trends that we are seeing in artificial intelligence, the green transition and healthcare. Moreover, Chinese authorities have reaffirmed their support for these industries in recent comments. Our portfolio is mostly positioned on companies that are leaders in their fields, and are generating high cash flows to sustain decent margins against the current backdrop of modest growth. We are also keeping significant exposure to Taiwan, mainly through companies along the semiconductor supply chain, which should benefit from the AI cycle. We strengthened our position in Taiwan Semiconductor and opened one in Lotes, which specialises in the design and manufacturing of precision electronic interconnect components and hardware such as CPU brackets.

Performance Overview

Data as of:  16 Apr 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.
Source: Carmignac at 17/04/2024

Carmignac Portfolio China New Economy Portfolio overview

Below is an overview of the composition of the portfolio.

Geographical Breakdown

Data as of:  28 Mar 2024.
Asia100.0 %
Total % Equities100.0 %
Asia100.0 %
cnChina
74.4 %
twTaiwan
22.4 %
hkHong Kong
3.2 %

Key figures

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

Exposure Data

Data as of:  28 Mar 2024.
Equity Investment Weight97.2 %
Net Equity Exposure116.0 %
Number of Equity Issuers38
Active Share88.8 %

The strategy in a nutshell

Discover the Fund’s main features and benefits through the words of the Fund Manager.
Fund Management Team
[Management Team] [Author] Li-Labbe Haiyan

Haiyan Li-Labbé

Fund Manager
Through an active conviction and sustainable approach, we focus on domestic companies in China's new economy that can benefit from the country's economic transition and long-term reforms.
[Management Team] [Author] Li-Labbe Haiyan

Haiyan Li-Labbé

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. Performance is shown net of fees (excluding any subscription fees payable to the distributor). 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.
Carmignac Portfolio is a sub-fund of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive.
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.