Carmignac Portfolio Patrimoine

The equity markets experienced a volatile month in August 2024: despite the ferocity and depth of the sell-off in early August, equity markets were quick to recover, with many indices back at their previous highs at the end of the month. The market's recovery was driven by a shift towards safer assets and a defensive rotation in sectors.

Several forces triggered the sell-off in early August, including weak US macro data which exacerbated expectations for rate cuts, the implosion of the Yen carry trade as well as other technical market factors.

Government bond yields fell as expectations of interest rate cuts grew, particularly in the U.S. and Europe. This reflected the market’s anticipation of a more accommodative monetary policy from the Federal Reserve. Unlike equities, the credit markets showed minimal reaction to the mini-crisis at the beginning of the month

Gold also rose, reaching new highs. Meanwhile, major currencies such as the euro, pound sterling, Swiss franc, and yen continued to strengthen against the dollar

At the end of the month, all eyes were on Nvidia ‘s earnings report which revealed earnings that fell short of expectations, even though revenue more than doubled in the last quarter

The Fund's performance was negative, underperforming its reference indicator.

The fund’s performance was negatively impacted by currency fluctuations, especially due to the decline in the dollar. Although our exposure to the yen was beneficial, it was insufficient to counterbalance the dollar’s fall.

In the equities market, the healthcare sector, along with other defensive sectors, performed well. However, our technology holdings declined by the end of the month.

Our bond portfolio was once again bolstered by credit. However, our low exposure to duration prevented us from fully capitalizing on the decrease in interest rates.

The US economy is slowing down, but there's no need for the Fed to panic just yet. We believe the soft-landing scenario is still on track, thanks to the strong wealth effects from the equity and housing markets, as well as a healthy corporate sector.

We maintain our cautious positioning in terms of interest sensitivity, as market seems now too optimistic looking at both disinflation path and cuts in interest rates. The fund is still positioned for steepening of yield curves with a negative sensitivity on the end of US and EUR yield curves.

On Equities, the sharp sell-off beginning of August has cleaned some overcrowded trades but on political and geopolitical front there are still some risks justifying keeping some protections.

On currencies, we reduced our dollar position and keep our exposure to some emerging currencies offering attractive valuations or appealing carry.