Carmignac Emergents - Quarterly Letter from Fund Managers

  • +3.2%
    Relative performance of Carmignac Emergents A EUR Acc

    versus its reference indicator MSCI Emerging Markets NR Index.

  • 20.3%
    Of the current portfolio

    is invested energy transition and renewable industries.

  • 72.0%
    Exposure of Fund

    to companies aligned with SDGs and sustainable themes.

Carmignac Emergents1 was down –2.39% in the third quarter, compared with a –5.63% decline in its reference indicator. 2Year-to-date, the fund has delivered a performance of –16.83%, versus –15.44% for its indicator. During the third quarter, emerging-market equities continued the slide that started in early 2021. They underperformed their developed market counterparts by a large margin in what is looking more and more like a capitulation by investors in the main Asian markets – China, South Korea, and Taiwan.

What happened in emerging markets in Q3 2022?

After a surprising rebound in Q2, Chinese stocks changed course this summer and resumed their downward trend, undermined by the effects of Beijing’s zero-Covid policy. This policy is standing in the way of any real economic recovery because it’s sapping consumer and business confidence and preventing the stimulus to have the intended effect on the economy. The government could start to ease this policy after the Communist Party Congress in mid-October, but we doubt it will be revoked before winter is over. Our Chinese holdings (37% of the Fund’s assets at 30 Sept. 2022) are oriented mainly towards non-cyclical sectors and long-term growth themes. The performance of Chinese stocks in the coming months will be shaped largely by the outcome of negotiations under way in Hong Kong between the US Securities and Exchange Commission (SEC) and the Chinese market regulator, which has been asked to provide the SEC with access to Chinese companies’ audit papers. A preliminary agreement was reached in August – rather unexpectedly, since analysts still believed New York-listed Chinese companies would have to start delisting in 2023. We think a final agreement could be announced in December, which would restore investor confidence in Chinese equities after two bleak years for this asset class. Barring such an agreement, Chinese stocks will probably remain under pressure until next June, when Alibaba is expected to join the Stock Connect programme, enabling investors in mainland China to buy its shares listed in Hong Kong. Chinese households have built up considerably more savings than those in the United States, which will provide new investor base for the Chinese companies listed in Hong Kong.

A positive surprise in the third quarter came from Latin America. Our Brazilian holdings (13% of the Fund’s assets) scored early gains ahead of the first round of presidential elections, with most polls pointing to a Lula victory. Investors seemed happy with this expected result, given that his choice for vice president, Geraldo Alckmin coming from a centrist party. But what really helped investors sentiment is the expectations regarding the regional elections, that pointed the likelihood of a right-wing majority in the Congress. The Congress is a powerful institution in Brazil and will likely block any attempt by the new elected President to walk back the privatisation of Eletrobras – a key reform of the Bolsonaro government. Our Mexican investments (5% of the Fund’s assets) also contributed to our outperformance in Q3. Mexican companies are benefitting from a structural trend towards nearshoring. With geopolitical tensions high between the US and China, and with firms around the world reconfiguring their global supply chains, Mexico is the country that stands to see the biggest increase in exports to regional markets. The International Bank for Reconstruction and Development estimates that Mexican exports could swell by $35.3 billion over the next three years. We hold Banorte in our portfolio; the rising interest rates are a boon to this Mexican bank since most of its loan book consists of variable-rate issues, and it’s in talks to acquire Citigroup’s Banamex subsidiary at a low valuation.

Adjustments and current positioning

We stepped up our exposure to South Korea (16% of the Fund’s assets) in the third quarter, now that valuations (measured by Price/Earnings ratios) in the country have become very attractive after an abysmal 18 months. South Korean stocks were the first to price in a sharp global recession – and we believe they’ll be the first to bounce back. We also increased our exposure to Brazil by buying stock in Eletrobras, Latin America’s biggest power utility company. 98% of the electricity it produces comes from renewable sources – specifically hydro, solar, and wind power – making it one of the world’s leading renewable energy suppliers and helping to give Brazil the second-highest country rating for its energy mix. What’s more, corporate governance at Eletrobras is now excellent thanks to changes made when it was privatised. Our analyses and the company’s most recent earnings releases show that it’s priced very attractively, offering a return of 13% (after inflation), or some 18% nominally, over the lifetime of its concessions.

We’re still cautious on India since valuations in the country appear stretched and its economy is highly vulnerable to rising energy prices. Both its stock market and its currency could fall – but that would give us attractive entry points for shoring up our Indian holdings.


Socially responsible investment is central to our approach

Since its inception in 1997, Carmignac Emergents has combined what we consider our emerging-market DNA since 1989 with our commitment to strengthening our credentials in socially responsible investment. In welding together those two areas of expertise, we aim to add value for our investors while having a positive impact on society and the environment.

Classified as an Article 9 fund under the Sustainable Finance Disclosure Regulation (SFDR)4 and was awarded France’s SRI label in 2019 and Belgium’s Towards Sustainability label in 20205


Classified as an Article 9 fund under the Sustainable Finance Disclosure Regulation (SFDR) and was awarded France’s SRI label in 2019 and Belgium’s Towards Sustainability label in 2020

As an Article 9 Strategy, the Fund will invest mainly in shares of emerging companies that have a positive outcome on environment or society and derive the majority of their revenue from goods and services related to business activities which align positively with SDGs. This sustainable objective will be measured and monitored by the percentage of revenues aligned with UN Sustainable Development Goals (SDGs)6 .

Our portfolio is currently structured around 4 major socially responsible investment (SRI) themes that are central to our process:

Fund positioning as of 30/09/2022


As a reminder, our socially responsibility approach is based on three pillars:

  • Invest selectively and with conviction, giving priority to sustainable growth themes in underpenetrated sectors and countries with sound macroeconomic fundamentals.

  • Invest for positive impact, favouring companies that deliver solutions to environmental and social challenges in emerging markets and reducing our carbon imprint by at least 30% relative to the MSCI Emerging Markets Index. Our sustainable objective is: >50% Fund’s AUM invested in companies with >50% revenue derived from goods and services positively aligned with at least 1 of 9 targeted United Nations Sustainable Development Goals.

  • Invest sustainably by consistently incorporating environmental, social and governance (ESG) criteria into our analyses and investment decision.

1Carmignac Emergents A EUR Acc (ISIN : FR0010149302). * Risk Scale from the KIID (Key Investor Information Document). Risk 1 does not mean a risk-free investment. This indicator may change over time. Past performance is not necessarily indicative of future performance. The return may increase or decrease as a result of currency fluctuations. Performances are net of fees (excluding possible entrance fees charged by the distributor). Performance in euros as of 30/09/2022.
2 Reference indicator: MSCI EM NR USD (Reinvested net dividends rebalanced quarterly). From 01/01/2013 the equity index reference indicators are calculated net dividends reinvested. Carmignac, Bloomberg, company data, EM Advisors Group, CICC, JPM Research, 30/09/2022.
Carmignac, Company data, 30/09/2022. Carmignac's portfolios are subject to change at any time.
3The proprietary ESG system START combines and aggregates market leading data providers ESG indicators. Given the lack of standardisation and reporting of some ESG indicators by public companies, not all relevant indicators can be taken into consideration. START provides a centralised system whereby Carmignac’s proprietary analysis and insights related to each company are expressed, irrespective of the aggregated external data should it be incomplete. For more information, please refer to our website.
4 The EU Sustainable Finance Disclosure Regulation (SFDR) 2019/2088 “lays down harmonised rules on the provision of sustainability-related information with respect to financial products”. For further information, see
5Carmignac Emergents and Carmignac P. Emergents both obtained the French and Belgian SRI labels. ; ;
650% of the Fund’s AUM* is invested in companies that derive more than 50% of their revenues from business activities that are positively aligned with at least 1 of the 9 Sustainable Development Goals selected for this Fund For more information please visit
Carmignac as at 30/09/2022. 1Carmignac Emergents A EUR Acc (ISIN : FR0010149302). Reference indicator: MSCI EM NR USD) (Reinvested net dividends rebalanced quarterly.

Carmignac Emergents

Grasping the most promising opportunities within the emerging universe

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Carmignac Emergents A EUR Acc

ISIN: FR0010149302
2018 2019 2020 2021 2022 2023 (YTD)
Year to date
Carmignac Emergents A EUR Acc -18.60 % +24.73 % +44.66 % -10.73 % -15.63 % +0.73 %
Referentie-indicator -10.27 % +20.61 % +8.54 % +4.86 % -14.85 % +1.16 %

Scroll rechts om de volledige tabel te zien

3 jaar 5 jaar 10 jaar
Carmignac Emergents A EUR Acc +4.46 % +3.96 % +3.58 %
Referentie-indicator +4.94 % +1.15 % +3.90 %

Scroll rechts om de volledige tabel te zien

In het verleden behaalde resultaten zijn geen garantie voor de toekomst. De resultaten zijn netto na aftrek van kosten (inclusief mogelijke in rekening gebrachte instapkosten door de distributeur) .

Bron: Carmignac op 31/05/2023

Instapkosten : 4,00% van het bedrag dat u betaalt wanneer u in deze belegging instapt. Dit is het hoogste bedrag dat u in rekening zal worden gebracht. De persoon die u het product verkoopt, informeert u over de daadwerkelijke kosten.
Uitstapkosten : Wij brengen voor dit product geen uitstapkosten in rekening.
Beheerskosten en andere administratie - of exploitatiekos ten : 1,54% van de waarde van uw belegging per jaar. Dit is een schatting op basis van de feitelijke kosten over het afgelopen jaar.
Prestatievergoedingen : 20,00% max. van de meerprestatie als het rendement sinds het begin van het boekjaar hoger is dan dat van de referentie-indicator en er geen minderprestatie uit het verleden meer moet worden goedgemaakt. Het feitelijke bedrag zal variëren naargelang van de prestaties van uw belegging. De schatting van de totale kosten hierboven omvat het gemiddelde over de afgelopen vijf jaar, of sinds de introductie van het product als dat minder dan vijf jaar geleden is.
Transactiekosten : 1,09% van de waarde van uw belegging per jaar. Dit is een schatting van de kosten die ontstaan wanneer we de onderliggende beleggingen voor het product kopen en verkopen. Het feitelijke bedrag zal varieert naargelang hoeveel we kopen en verkopen.

Carmignac Emergents A EUR Acc

ISIN: FR0010149302

Aanbevolen minimale beleggingstermijn

Laagste risico Hoogste risico

1 2 3 4 5 6 7
Voornaamste risico's van het Fonds

AANDELEN: Aandelenkoersschommelingen, waarvan de omvang afhangt van externe factoren, het kapitalisatieniveau van de markt en het volume van de verhandelde aandelen, kunnen het rendement van het Fonds beïnvloeden.

OPKOMENDE LANDEN: De nettoinventariswaarde van het compartiment kan sterk variëren vanwege de beleggingen in de markten van de opkomende landen, waar de koersschommelingen aanzienlijk kunnen zijn en waar de werking en de controle kunnen afwijken van de normen op de grote internationale beurzen.

WISSELKOERS: Het wisselkoersrisico hangt samen met de blootstelling, via directe beleggingen of het gebruik van valutatermijncontracten, aan andere valuta’s dan de waarderingsvaluta van het Fonds.

DISCRETIONAIR BEHEER: Het anticiperen op de ontwikkelingen op de financiële markten door de beheermaatschappij is van directe invloed op het rendement van het Fonds, dat afhankelijk is van de geselecteerde effecten.

Het fonds houdt een risico op kapitaalverlies in.

* Risicocategorie van het KID (essentiële-informatiedocument) indicator. Risicocategorie 1 betekent niet dat een belegging risicoloos is. Deze indicator kan in de loop van de tijd veranderen.