The Fund's performance was nearly flat, falling short of its reference indicator due to sector rotation.
Two of our biggest convictions, Novo Nordisk and Microsoft, underperformed due to external factors such as Roche entering the obesity segment and the negative impact of the CrowdStrike cyber-panic.
On the other hand, our convictions in the Healthcare sector, particularly in life sciences companies like Lonza and Thermo Fischer, performed well.
Our convictions in the Financial sector, such as ICE or S&P Global and Mastercard, experienced strong performance, with returns in the range of +4% to +10%.
Our macro-overlay framework continues to indicate a defensive stance towards equity markets, aligning with our cautious macroeconomic outlook.
In line with this perspective, we have increased the defensive bias of the portfolio in recent months and are comfortable with our current positioning.
Colgate Palmolive and Procter & Gamble delivered solid results over the last 6 months, surpassing expectations. We have gradually increased our exposure to these stocks, and they now rank among the top 3 holdings of the fund, alongside Microsoft.
We significantly reduced our exposure to Semiconductors and Nvidia in particular. We decided to take some profits after strong YTD performance’ with a view to adding back on momentum reversal.
North America | 66.3 % |
Europe | 33.7 % |
Total % Equities | 100.0 % |
Carmignac Portfolio Grandchildren is an intergenerational Fund that focuses on high-quality companies to help investors build capital not only for themselves, but also for future generations.
Market environment
In the US, the economy is slowly paving the way for a soft landing, with job creation and retail sales easing over the month. At the same time, inflation continued to trend lower. In Europe, growth surprised to the upside at +0.3% in the second quarter, while inflation picked up slightly.
As expected, the Fed left short-term rates unchanged during their July meeting. However, the combination of a less dynamic job growth and lower inflation sets the stage for the Fed to potentially lower rates in September.
The Bank of Japan raised interest rates for the first time in 15 years and unveiled a detailed plan to slow its massive bond buying, taking another step towards normalization.
In July, political volatility came from the US. Trump survived an assassination attempt, Biden ended his 2024 candidacy, and Harris' nomination boosted Democrats' standing in the polls, hinting at a closely contested election.
Equity market underwent a significant rotation during the month, with small cap and value stocks performing well and outperforming mega cap and growth stocks.
The Q2 earnings season has started and brought a mix of both positive and negative surprises, leading to increased market volatility. In summary, the results have been strong on EPS beats but weak on sales. Tech sectors have raised concerns after some disappointment about the pace and timing of AI revenue.