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Carmignac Absolute Return Europe: Letter from the Fund Managers

Publicado
10 julio 2024
Tiempo de lectura
6 minuto(s) de lectura

Over the second quarter of 2024, Carmignac Absolute Return Europe (A EUR share class) realized a positive performance of +0.27%.

Market environment

After a strong start to the year, the second quarter saw European markets enter a period of consolidation, with the Stoxx Europe 600 essentially trading flat for the whole period. A combination of macro factors and geopolitical issues set the scene for a volatile quarter. The quarter started with a selloff in April driven by a combination off the shock of a full-scale attack by Iran on Israel soil and various mixed macro data, including evidence of stickier than expected inflation which propelled bond yields higher and pushed out the expected timing of US rate cuts.

During this period of increased risk premium and volatility, investor confidence was greatly affected, leading to a significant wave of derisking. This, in turn, created a highly rotational market, de grossing of risk resulting in the most shorted areas of the market outperforming. This shift in sentiment proved to be unhelpful for the Q1 earnings season, which saw more often than not, share prices of companies that beat expectations fail to make any progress and even the smallest of earnings disappointments being met with brutal sell offs. Towards the end of May the markets began to recover again as investors bought the dip caused by weaker economic data, rolling over of bond yields, which subsequently supported equity markets. Yet again, growing hopes of falling inflation and lower rates catalysed outperformance by growth stocks.

In June, despite limited corporate news, the market experienced significant volatility due to various factors. Geopolitical events, such as elections in India and the anticipation of the UK and US elections, played a role. However, the most impactful event was the surprise election announcement by Macron in France. This announcement led to a substantial increase in French bond yields (OAT v Bund spreads) and a significant decline in French equities. The CAC 40 index fell more than -6% in just a few days, dragging down most other European markets. These political fears, which drove higher risk premia combined with continuing weak macro data saw another sell off in European equities, leaving the Stoxx 600, down -1.6% for the month of June and largely flat for the overall quarter, returning only a meagre +0.20%.

Within Europe, the best performing sectors were Basic Resources, Healthcare, Technology, Banks and Communications while the main laggards were Autos, Travel and Leisure, Consumer Products and Chemicals.

Performance review

Despite an environment of volatile and challenging market conditions the fund was able to produce a small positive return during the quarter. This was a quarter requiring diligent risk management to navigate market volatility, which saw our gross exposure being flexed between 125% and 145%, and our net exposure percentage between the high teens to the low 30’s. Disciplined stock selection ensured that both the long and short side of our portfolio produced positive returns. The biggest positive contributions came from longs in Technology, Communications and Healthcare, and short positions in Consumer discretionary, Consumer staples and Materials. The main detractors came from longs in industrials, consumer discretionary and financials. The latter is particularly being impacted by the unexpected political events.

During the quarter, portfolio activity centred around adding to defensive growth in sectors such as healthcare and communications and reducing cyclicality through reduction in various longs. In addition, we added to selective shorts in industrials and consumer discretionary names, to take advantage of expected weakness in earnings in the upcoming results season. Elsewhere, we took some profits in the retail banks which have performed well on the back of strong growth in net interest income and rising expectations of cash returns.

Overall, the core of the portfolio didn’t change a lot. We continue to run the dominant themes of artificial intelligence (AI) beneficiaries and GLP-1 anti-obesity drugs. Specifically in the Technology book, we added to companies poised to benefit from the capital expenditure required to build the semiconductor manufacturing capacity which is crucial for driving the AI revolution. Additionally, we added positions in companies that are at the forefront of developing the next generation of high bandwidth DRAM, essential for supporting advanced AI models. Towards the end of the quarter, after a very strong run, we took profits in the poster child of AI, Nvidia, where in the absence of material incremental upgrades, its valuation is beginning to look ‘challenged’. In addition, we believe the shares may also have experienced excessive momentum following its recent stock split, which is likely to have driven incremental retail buying activity. Therefore, we believe that the shares may be in need of a temporary pause or consolidation. However, if there is a pullback in the share price, we are likely to re-engage. Elsewhere, we have widened our research to include other enablers of the AI transformation including clean energy suppliers who can provide the energy to the power-hungry data centres that form the backbone of AI infrastructure. This also includes a property company that is expanding its portfolio into datacentres in Europe. In the Healthcare sector, we have added to our investment in Novo Nordisk the market leader in anti-obesity medication and introduced a new name, Zealand Pharma, a mid-cap stock with a very promising next generation GLP-1 drug which we believe will generate very significant upside.

Winners:

  • Novo Nordisk (Long) - positive earnings report and new trials highlight wider medical benefits from their GLP-1 portfolio.
  • SK Hynix (Long) - significant earnings beat from accelerating demand for High Bandwidth Memory essential for AI.
  • TSMC (Long) - earnings beat and raised forward guidance.
  • First Solar (Long) - strong demand for solar energy driven by demand from AI infrastructure.
  • Nvidia (Long) - stock powered higher by impressive Q1 earnings report.

Losers:

  • Adyen (Long) - negative reaction to small earnings miss.
  • Airbus (Long) - lowered guidance for aircraft deliveries due supply chain bottlenecks.
  • Medical device (Short) - aggressive short covering rally post signing a settlement agreement.
  • Fluence Energy (Long) - profit taking post a strong run, causing a sell off on the back of Trump presidency fears.
  • Ryanair (Long) - CEO reduced guidance for pricing for the summer season.

Outlook

Although during parts of the first half of the year, European equity markets benefited from the US momentum ‘wave’, they predominantly lagged the US during most of Q2. This was primarily due to the contrasting sector composition in Europe, which has a lower weighting in technology and growth sectors compared to the US. Additionally, European banks had a strong performance in Q1, positioning them as potential leaders in the first half of the year alongside the technology sector, however, their performance stagnated in Q2. This was mainly due to the Iran-Israel conflict flaring up in April, and again the surprise French elections being announced in June. These political events caused overall an equity risk premia spike, and European banks along other EU cyclicals suffered a setback.

As a result, the starting point as we now enter the second half of the year is slightly different between the two regions. Furthermore, Europe's strong reliance on global trade, particularly with China, has resulted in prolonged periods of weak growth. This can be attributed to sluggish demand in key sectors such as luxury goods and automobiles, as well as ongoing inventory adjustments in the chemicals industry. As a result, the disparity between Europe and other regions, including the US, has widened even further.

Therefore, as we now look ahead into the second half of the year, not only is the US economy coming off a higher base, but it’s also the US that will have to contend with its own upcoming Presidential election, all the news flow and swings in expectations around the timing of Federal Reserve rate cuts. These uncertainties could also elevate risk and shift the perception between the two regions.

With Europe and the UK (expected soon) now embarking on rate cuts, a possible shift of focus to more cyclical depressed areas of the market could unfold. If so, European equities could again become a candidate for investors to find value. Furthermore, if the rate cuts in Europe are successful in stimulating growth, coupled with the ongoing benefits of real wage growth for consumers, there is a possibility of early signs of growth emerging in the EU. This at a time when the US consumer seems to be faltering. It is still too early to make a definitive assessment, but we are hopeful that the upcoming Q2 result season will provide us with some insights into how these trends are developing.

Meanwhile, in the US, the focus remains firmly on Technology and Quality growth. If expectations for rate cuts continue and large cap Tech companies can sustain their earnings performance, it appears that this trend will remain intact, at least for the time being. However, the risks might be building. Not only are valuations becoming more elevated, but there is also the possibility that "bad" economic data could have a negative impact on the markets. So far, bad macro is supporting rate cut expectations, but that might change. In addition, as the market leadership is becoming even more narrow, the overall risks are growing. But above all, the bigger ‘test’ for the market short term, will no doubt be the next set of upcoming quarterly results. After experiencing two consecutive quarters of exceeding expectations and achieving growth, the question now arises: can they continue to generate enough positive surprises and upgrades to sustain their momentum? No doubt, the bar has been risen.

These are all risks and opportunities, and we stay agile and well prepared to swiftly shift our risk, if and where required. We will also continue to employ diligent risk management outside our single stock longs and shorts, using various option strategies, taking advantage of cheap/low volatility.

Finally, post the UK election last week, our objective is to do more work on domestic UK exposed names. We believe, a new stable Labour government is good news for the UK, as long the fiscal situation doesn’t worsen. Additionally, the UK equity market, which has been overlooked by investors for years, is currently undervalued both in relative and absolute terms. This presents potential investment opportunities for us.

Carmignac Absolute Return Europe

An opportunistic and style agnostic long/short approach to European equitiesDiscover the fund page

Carmignac Absolute Return Europe A EUR Acc

ISIN: FR0010149179
Duración mínima recomendada de la inversión
3 años
Escala de riesgo*
3/7
Clasificación SFDR**
Artículo 8

*Escala de riesgo del KID (Documento de datos fundamentales). El riesgo 1 no implica una inversión sin riesgo. Este indicador podría evolucionar con el tiempo. **El Reglamento SFDR (Reglamento sobre la divulgación de información relativa a la sostenibilidad en el sector de los servicios financieros, por sus siglas en inglés) 2019/2088 es un reglamento europeo que requiere a los gestores de activos clasificar sus fondos, en particular entre los que responden al «artículo 8», que promueven las características medioambientales y sociales, al «artículo 9», que realizan inversiones sostenibles con objetivos medibles, o al «artículo 6», que no tienen necesariamente un objetivo de sostenibilidad. Para más información, visite: https://eur-lex.europa.eu/eli/reg/2019/2088/oj?locale=es.

Principales riesgos del Fondo

Riesgo relacionado con la Estrategia Long/Short: Este riesgo está relacionado con las posiciones compradoras o vendedoras iniciadas a fin de ajustar la exposición neta al mercado. El Fondo podría incurrir en pérdidas cuantiosas si sus posiciones largas y cortas evolucionasen de forma simultánea en sentido contrario y de manera desfavorable.Renta Variable: Las variaciones de los precios de las acciones cuya amplitud dependa de los factores económicos externos, del volumen de los títulos negociados y del nivel de capitalización de la sociedad pueden influir negativamente en la rentabilidad del Fondo.Tipo de Interés: El riesgo de tipo de interés se traduce por una disminución del valor liquidativo en caso de variación de los tipos de interés.Tipo de Cambio: El riesgo de cambio está vinculado a la exposición, por medio de inversiones directas o de instrumentos financieros a plazo, a una divisa distinta de la divisa de valoración del Fondo.
El fondo no garantiza la preservación del capital.

Gastos

ISIN: FR0010149179
Costes de entrada
4,00% del importe que pagará usted al realizar esta inversión. Se trata de la cantidad máxima que se le cobrará. Carmignac Gestion no cobra costes de entrada. La persona que le venda el producto le comunicará cuánto se le cobrará realmente. 
Costes de salida
No cobramos una comisión de salida por este producto.
Comisiones de gestión y otros costes administrativos o de funcionamiento
2,30% del valor de su inversión al año. Se trata de una estimación basada en los costes reales del último año.
Comisiones de rendimiento
20,00% max. del exceso de rentabilidad cuando la rentabilidad sea positiva y el valor liquidativo supere la cota máxima o «High-Water Mark». El importe real variará en función de lo buenos que sean los resultados de su inversión. La estimación de los costes agregados anterior incluye la media de los últimos 5 años, o desde la creación del producto si se produjo hace menos de 5 años.
Costes de operación
0,98% del valor de su inversión al año. Se trata de una estimación de los costes en que incurrimos al comprar y vender las inversiones subyacentes del producto. El importe real variará en función de la cantidad que compremos y vendamos.

Rentabilidades

ISIN: FR0010149179
Carmignac Absolute Return Europe2.5-8.08.914.64.4-1.35.212.6-6.40.0
Carmignac Absolute Return Europe+ 1.5 %+ 3.5 %+ 3.1 %

Fuente: Carmignac a 28 jun. 2024.
​Las rentabilidades históricas no garantizan rentabilidades futuras.  La rentabilidad es neta de comisiones (excluyendo las eventuales comisiones de entrada aplicadas por el distribuidor)

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Comunicación publicitaria. Consulte el KID/folleto antes de tomar una decisión final de inversión. El presente documento está dirigido a clientes profesionales.

Este material no puede reproducirse, ni total ni parcialmente, sin el consentimiento previo de la sociedad gestora. Este material no constituye una oferta de suscripción ni un asesoramiento de inversión. Este material no constituye una recomendación contable, jurídica o tributaria y no debe ser tenido en cuenta a tales efectos. Este material se proporciona con carácter exclusivamente informativo y podría no resultar fiable a la hora de evaluar las ventajas derivadas de invertir en cualquier tipo de participaciones o valores mencionados en el presente documento o de cara a cualquier otra finalidad. La información contenida en este material podría no ser completa y estar sujeta a modificación sin preaviso alguno. Las informaciones se expresan a fecha de redacción del material y proceden de fuentes propias y externas consideradas fiables por Carmignac, no son necesariamente exhaustivas y su exactitud no está garantizada. En consecuencia, Carmignac, sus responsables, empleados o agentes no proporcionan garantía alguna de precisión o fiabilidad y no se responsabilizan en modo alguno de los errores u omisiones (incluida la responsabilidad para con cualquier persona debido a una negligencia). ​Las rentabilidades históricas no garantizan rentabilidades futuras.

La rentabilidad es neta de comisiones (excluyendo las eventuales comisiones de entrada aplicadas por el distribuidor). La rentabilidad podrá subir o bajar a resultas de las fluctuaciones en los tipos de cambio en el caso de las participaciones que carezcan de cobertura de divisas.
La mención a determinados valores o instrumentos financieros se realiza a efectos ilustrativos, para destacar determinados títulos presentes o que han figurado en las carteras de los Fondos de la gama Carmignac. Ésta no busca promover la inversión directa en dichos instrumentos ni constituye un asesoramiento de inversión. La Gestora no está sujeta a la prohibición de efectuar transacciones con estos instrumentos antes de la difusión de la información.

El acceso a los Fondos podrá estar restringido a determinadas personas o países. Este material no está dirigido a ninguna persona de ninguna jurisdicción en la que (debido al lugar de residencia o nacionalidad de la persona o a cualquier otra cuestión) el material o la disponibilidad de este material esté prohibido. Las personas objeto de estas prohibiciones no deben acceder a este material. La tributación depende de la situación de la persona. Los Fondos no están registrados para su distribución a inversores minoristas en Asia, Japón, Norteamérica ni están registrados en Sudamérica. Los Fondos Carmignac están registrados en Singapur como institución de inversión extranjera restringida (exclusivamente para clientes profesionales). Los Fondos no han sido registrados en virtud de la ley de valores estadounidense (US Securities Act) de 1933. Los Fondos podrán no ofertarse o venderse, directa o indirectamente, en beneficio o en nombre de una «Persona estadounidense», según la definición recogida por el Reglamento estadounidense S (Regulation S) y la ley FATCA. La decisión de invertir en el fondo debe tomarse teniendo en cuenta todas sus características u objetivos descritos en su folleto. Podrá consultar los folletos de los Fondos, los documentos KID, el VL y los informes anuales en la web www.carmignac.com o previa petición a la Gestora. Los riesgos, comisiones y gastos corrientes se detallan en el documento de datos fundamentales (KID). El KID deberá estar a disposición del suscriptor con anterioridad a la suscripción. El suscriptor debe leer el KID. Los inversores podrían perder parte o la totalidad de su capital, dado que el capital en los fondos no está garantizado. Los Fondos presentan un riesgo de pérdida de capital.

Para España : Los Fondos se encuentran registrados ante la Comisión Nacional del Mercado de Valores de España, con los números : Carmignac Sécurité 395, Carmignac Portfolio 392, Carmignac Patrimoine 386, Carmignac Long-short European Equities 398, Carmignac Investissement 385, Carmignac Emergents 387, Carmignac Credit 2025 1947, Carmignac Euro-Entrepreneurs 396, Carmignac Court Terme 1111.​

La Sociedad gestora puede cesar la promoción en su país en cualquier momento. Los inversores pueden acceder a un resumen de sus derechos en español en el siguiente enlace sección 6: www.carmignac.es/es_ES/article-page/informacion-legal-1759​

Carmignac Portfolio hace referencia a los sub fondos de Carmignac Portfolio SICAV, una compañía de inversión bajo derecho luxemburgués, conforme a la directiva UCITS. Los Fondos son fondos comunes de derecho francés (FCP) conforme a la directiva UCITS o AIFM.