The Adviser Issue 11 | Page 48

MARKETS & INVESTING

Cumulative performance since launch , compared with 74 % for its reference indicator ¹.

The fund ranks in the top quartile of its Morningstar category for its performance since launch ².

Sources : Carmignac , Morningstar ; data for the A GBP Acc share class at 31 / 05 / 2024 . ¹ Reference indicator : MSCI World ( USD ) ( net dividends reinvested ). ² Morningstar category : Global Large-Cap Growth Equity .

Time is an ally for …

Investors Anyone who invests in equities needs to have a long-term view . Data shows that investors who keep their holdings for long periods are less likely to experience losses , thanks largely to the effect of compounding . The concept of compounding – generally thought of in terms of interest – is simple : when you place your money in an interest-bearing account , you earn interest not only on your initial investment , but also on the interest you accumulate along the way . Or in other words , the more time that passes , the more interest you ’ ll earn on your interest .

Businesses We target only high-quality companies with a track record of stable , high profit margins and that reinvest their earnings in future growth . Time works to the benefit of these companies , as it lets them reap the rewards of their capital investments and anchor their dominant position through innovation and R & D . Over time , their capital investments have an effect similar to that of compounded interest . Taking Microsoft as an example , the company introduced its Azure cloud computing service in October 2008 – right in the middle of the subprime crisis . Yet five years later , Azure generated $ 1 billion in revenue for Microsoft and it ’ s now the firm ’ s largest revenue stream , bringing in $ 70 billion in 2023 . With Azure , Microsoft was able to diversify its business model and create additional growth drivers by reinvesting wisely .

Source : Bloomberg , May 2024

Our FP Carmignac Global Equity Compounders Fund As a quality-focussed investor , we must be able to identify promising businesses and then be patient as they grow and develop . To that end , we use a proprietary investment process developed by Mark Denham over 20 years ago . The process acts like a compass , guiding us so that we can ensure the companies we select consistently meet our criteria .

Despite the many challenges encountered over the past five years – including the biggest sector rotation in equity markets in a decade – time has worked in our Fund ’ s favour . Not only have we outperformed global equities , but we ’ ve also made up for the decline in 2022 . Our success can be attributed primarily to our patience and disciplined approach , which is reflected in the positions we ’ ve taken in our main long-term convictions . These companies have been in our portfolio for an average of over four years , illustrating how strongly we believe in their potential .

50 % of the investments in our portfolio have been there since the Fund was launched in 2020

The Fund ’ s 10 largest holdings

MICROSOFT NOVO NORDISK PROCTOR & GAMBLE COLGATE PALMOLIVE NVIDIA S & P GLOBAL ASML L ' ORÉAL THERMO FISHER SAP

We ' ve been investing since : 3 years & 8 months Launch 2 years & 3 months 2 years & 3 months Launch 2 years & 2 months Launch Launch Launch Launch

Reference to certain securities and financial instruments is for illustrative purposes to highlight stocks that are or have been included in the portfolios of funds in the Carmignac range . This is not intended to promote direct investment in those instruments , nor does it constitute investment advice . The Management Company is not subject to prohibition on trading in these instruments prior to issuing any communication . The portfolios of Carmignac funds may change without previous notice . Source : Carmignac , 31 / 05 / 2024 .

Examples of portfolio convictions held since 2020

Nvidia This US-based company , initially known for its high-end graphics cards , has become a leading developer of artificial intelligence solutions . Nvidia has gained 1,139 % since it ’ s been in our portfolio .

Novo Nordisk This Danish pharmaceutical company is a pioneer in its field and the world ’ s leading developer of diabetes treatments . We were impressed by the firm ’ s innovative approach to R & D , as very few companies have the explicit goal of curing the very disease that supplies most of their revenue . Yet that ’ s exactly what Novo Nordisk has set out to do with its Wegovy ® weight-loss drug . Novo Nordisk has gained 352 % since it ’ s been in our portfolio .

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