Carmignac Patrimoine: flexibility and selectivity go together

The surge in coordination between the European Commission, the European Central Bank and national governments to tackle the Covid-19 crisis has given Europe fresh impetus, providing a clearer sense of the region’s future.

Equities, corporate credit, sovereign bonds – where should you be investing your money? Based on thorough-going analysis, we feel that fixed income now holds the greatest potential value. For example, we view bank bonds as more attractive than the shares of European banks, whose profit margins have been eroded by a combination of steadily falling interest rates and stricter regulation. Sovereigns from the eurozone periphery, one of our investment themes since August 2012, likewise offer a promising avenue for those who wish to benefit directly from the new trend towards coordination.
Once an investment theme has been identified, David and Rose share their views on how they can most effectively exploit it by choosing from among a variety of asset classes, regions and sectors.

The Covid-19 outbreak has badly battered the aviation industry. Our equity and fixed income analysts have taken a closer look at the issue in order to identify secular impacts and potential opportunities. Attractive points of entry in corporate credit have convinced us to buy the bonds of specific airlines and aircraft makers, whereas we have sold all the shares related to the sector in our portfolio.

Why? Because an equity investor is looking for growth, and on this point our investment case has changed completely. On the other hand, as credit investors, we place a premium on debt sustainability – that is, the debtor’s ability to make timely interest payments and pay back the principal. We believe, on that basis, that the credit spreads offered by some issuers properly reward investors for the risk incurred.

As long-standing investors in Amazon, we have spent a number of years trying to figure out what drives this sector’s success and competitive dynamics. That effort led our consumer analyst and emerging markets experts to hunt down e-commerce opportunities in areas that are yet underpenetrated.

As a result, we invested in Mercadolibre, Latin America’s leading provider in the field, and Sea Limited, which serves the East Asian market.

Investors who want to maximize their potential returns.

To choose the most attractive opportunity offered by a given sector, country or even company.

By leveraging the solid, complementary insights of our experts and our global, flexible investment approach.