Carmignac Absolute Return Europe
French mutual fund (FCP)European marketSRI Fund Article 8FR001400JG56
- A diversified portfolio, based on a top-down and bottom-up approach, to take advantage of market inefficiencies.
- Active management of the net equity exposure (-20% to +50%).
To 19/12/2024
Article
Carmignac Absolute Return Europe 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: Nov 29, 2024.
Johan Fredriksson
Dean Smith
Performance commentary
October was a frustrating month as the fund return was positive for the month, up until the very last day, when the market sold off due to a combination of macro driven and sector rotation pushing the fund into a small loss.
Our short book and derivatives hedging overlay produced a positive return, but this was modestly offset by losses in our long book.
Within the portfolio the most positive sector returns came from Financials and Communications while the main detractors came from Technology, Consumer Discretionary and Real Estate
• Key winners from our stock selection included our long position in Standard Chartered, which saw an earnings beat driven by strong performance in Asian wealth management, and our long position in Deutsche Telekom, which benefited from a positive capital markets day.
Other notable winners were our long position in SAP, which performed well after reporting strong numbers that highlighted accelerating growth, and our short position in a German IT services company, which posted a profit warning due to deteriorating demand.
The biggest laggards from our stock selection were our long position in ASML, which reported weak orders and provided lower guidance for 2025, and our long position in First Solar, which reported earnings below forecast.
Overall sector adjustments were modest but at the stock level we added to Financials, Communications and cyclical names in Industrials and Consumer Discretionary through a combination of short covering and additions to longs.
We continued to run a relatively low gross of around 105% while net was maintained within a range of 15% -mid 20S%.
Outlook strategy
• Building on last month's strategy, we capitalized on the early-month EU market sell-off by increasing our high-conviction long positions and covering or reducing shorts that were nearing their price targets.• At the sector level, we decreased our exposure to consumer staples and utilities, while increasing our allocation to healthcare following the sector's decline after Trump's selection of Kennedy Jr. as the new Health & Human Services Secretary.• We also added to our position in the Swiss company Galderma, making it one of our top 10 holdings. Galderma boasts a strong franchise in science-based skincare products and has a robust pipeline of new product launches, which we believe will drive market share gains and strong earnings growth.• Despite the volatility in European equities, we maintained disciplined market exposure, with gross exposure around 105% and net exposure between 18-25%.• In the short term, we anticipate that EU equities will begin to catch up with their US counterparts. At the start of the month, we observed that not only was the performance gap between the EU and US too wide, but so were the valuations.• Consequently, we have increased our positions in value and cyclical stocks in the EU to participate in this 'catch-up' trade, which is gradually gaining momentum.Performance Overview
Data as of: Dec 19, 2024.Carmignac Absolute Return Europe Portfolio overview
Below is an overview of the composition of the portfolio.Geographical Breakdown
Data as of: Nov 29, 2024.| Europe EUR | 18.3 % |
| Europe ex-EUR | 13.1 % |
| North America | 8.4 % |
| Others | 1.8 % |
| Index Derivatives | -22.8 % |
| Total % of alternative | 18.8 % |
 Germany | 5.8 % |
 France | 5.4 % |
 Netherlands | 3.5 % |
 Italy | 2.8 % |
 Greece | 0.6 % |
 Belgium | 0.5 % |
 Ireland | 0.3 % |
 Luxembourg | 0.3 % |
 Spain | -0.2 % |
 Finland | -0.7 % |
Key figures
Below are some key figures to help you understand the Fund's management and positioning.Exposure Data
Data as of: Nov 29, 2024.The strategy in a nutshell
Discover the Fund’s main features and benefits through the words of the Fund Managers.Johan Fredriksson
Dean Smith
Our objective is to provide a long-term absolute capital growth thanks to our dynamic and opportunistic take on European equities.
Market environment