Carmignac Portfolio Absolute Return Europe

The strategy adopts a dynamic, opportunistic approach with a top-down macroeconomic overlay, combined with bottom-up fundamental analysis. The fund maintains a flexible net exposure, ranging from -20% to +50% (typical exposure around +20%), adjusting according to risk/reward dynamics and economic cycles. Key sectors include financials, TMT, consumer, industrials, and healthcare, which compose approximately 80% of the portfolio, with the process guided by thematic lens' such as electrification, artificial intelligence, and defensive growth. The investment process integrates rigorous idea generation, including extensive company meetings, quantitative screening, thematic drivers, and ESG considerations. Stocks are selected based on comprehensive evaluation of business models, market positioning, valuations, and clear catalysts for performance. The portfolio typically holds up to 60 long positions and 50 shorts, diversified across market capitalisations ($5-$25bn is the sweetspot) and geographical exposure predominantly in Europe. Risk management is stringent, with defined price targets and disciplined sell rules triggering regular position reviews. The strategy employs hedging via options and futures, closely monitoring macroeconomic risks, liquidity, and sector correlations to limit downside risks. The fund is managed by Dean Smith and Johan Fredikrisson, running the same strategy they previously managed at TT.