Benefiting Profits of Investment Assets Today
In the second quarter of the year, the Carmignac Patrimoine fund, managed by Carmignac Gestion, saw a positive performance of around 2.3%. This growth was driven by stocks with long-term growth potential and titles that benefited from the economic recovery.
The focus of the fund remains on regions where persistent production gaps and moderate inflation provide little pressure to tighten monetary policy, such as Europe. The portfolio remains diversified by region, sector, and theme, with a focus on demographic and social change, digitalization, and the connected consumer.
The strength of the residential real estate market and the tight rental market could affect the consumer price index for rental housing. In the fixed-income area, Chinese government bonds were a clear winner.
In the equities sector, Hermès, Alphabet, and Facebook were among the stocks that benefited from the economic recovery. The outlook for stock markets remains positive, with the US economic output expected to be significantly above trend in the short term.
However, investors should remain cautious of persistent inflationary pressure until the end of the year. The risk of persistently high inflation is receding, making stocks with long-term growth potential more attractive. The expected price-to-earnings ratio for Facebook in 2022 is in line with the broad-based S&P 500, albeit with a much higher growth rate.
The US Federal Reserve signaled that it would react to an inflation increase earlier than previously expected by market participants. As a result, a reduction in fiscal and monetary support could boost the US dollar.
The portfolio's total duration has been increased, and the exposure in US dollars has been boosted. The focus on growth stocks has been increased, with a shift away from highly valued stocks.
The performance of the fund was also boosted by investments in Romanian government bonds and quasi-sovereign titles from the energy sector such as Pemex and Gazprom.
The yields on 10-year US Treasuries fell from 1.74 to 1.47 percent as expectations for the next fiscal package from US President Joe Biden decreased. The likelihood of tax increases in the US is decreasing as fiscal spending is constrained by the increasingly divided Democratic Party.
The management team overseeing the Carmignac Patrimoine fund includes Jacques Hirsch, Kristofer Barrett, Guillaume Rigeade, and Eliezer Ben Zimra.
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